Recently, the international potash market demand has increased, releasing a recovery signal.
Due to a strike by Vancouver port workers, shipments of commodities such as sulphur and potash have been suspended since July 1. The strike was recently resolved after government mediators intervened in a dispute between the union and the Port Authority. After the agreement was reached, shipments resumed Friday morning. North American fertilizer producer Nutrien has cut production at its Cory potash mine due to a lack of exports. Nutrien did not say how much product would be lost as a result of the production cuts. The mine reportedly has a potassium chloride capacity of 3 million tons per year. But in recent years, Cory has produced just 1m tonnes of potash a year. The Canadian shipment delay is unlikely to have a huge immediate impact on prices, but could provide some support for 1-2 months, with suppliers aiming to raise prices in the coming weeks.
For now, U.S. granular potassium chloride barge prices remain unchanged and activity remains sparse as domestic producers are expected to conduct summer fill operations in the next two weeks. The Brazilian market was affected by strong soybean season demand, and many suppliers had limited supply in July-August, which prompted suppliers to target higher prices. Brazil granular grade potassium chloride prices are estimated at $330-340 / ton CFR. Some offers have risen to $345 / t CFR, but it is understood that none of the deals reached that level during this week's evaluation window. However, it is undeniable that the Brazilian market demand will continue, and the market will pick up in the later period.
Demand in India is also strong at the moment as monsoon rains have started across the country. While standard KCL contract negotiations are still ongoing, the new Indian standard KCL contract is expected to be priced in the range of $315-322 / ton CFR with a 180-day letter of credit. The upcoming contracts in India will contribute to the recovery of demand in Southeast Asia, and shipments to India will also resume, helping to further strengthen market confidence and reduce further pressure on suppliers.
In general, the international potash market has been weak since the second half of last year due to increasing international supply, weakening demand and high inventories in many countries. At present, in addition to the several regions mentioned above, several western regions, including Southeast Asia and South Africa, may also have demand in the later stage, which will play a certain support for potash prices. Later with the increase in demand, the international potash market or a small recovery.
