Too much inventory to become common problem potash maker

Clicks: 8952013-09-13 15:31:31　Source: Top Fertilizer Agricultural Co., Ltd.

As the country's contract price with the Russian potash exporter BPC for the 2010 potash imports long-term agreement was 17% lower than the current domestic spot price, salt lake potash fertilizer, Guannong shares the two major potash fertilizer listed companies to further reduce pressure on product prices.
It is reported that conventional and Russian potash exporter BPC recently completed the 2010 long-term potassium fertilizer import contract, with a contract volume of 100 cases (20% up and down), and a CIF price of 350 US dollars / ton. 17%. According to sources, there is an additional condition in the contract that if the imported potash fertilizer can be shipped immediately, a rebate of US $ 25 per ton can be obtained.

BPC is the largest potash fertilizer supplier in the world and a long-term partner of potash fertilizer imports in China. Its price became the vane of potash fertilizer import prices in 2010. The domestic potash fertilizer generally follows the CIF price of imported potash fertilizer.

The external dependence of China's potash fertilizer is 67%. In the first half of 2008, it was the period when international agricultural product prices were high and the price of potash fertilizer surged. At that time, the domestic imported potash fertilizer FOB (that is, FOB price) was US $ 580 / ton, plus the high sea freight rate that year, the total CIF price reached US $ 650 /Ton. In 2009, China did not import potash fertilizer due to the great differences between the parties.

The price of imported potash fertilizer was too high in 2008, which restrained the demand and price of potash fertilizer in 2009. It is reported that in 2007 China's potash fertilizer consumption was about 900 tons, but in 2009 China's potash fertilizer consumption was only about 500. The drop in demand has caused domestic potash fertilizer prices to go from nearly RMB 4,000 / ton to around RMB 3,000 / ton in 2009. As the market expects that the import price in 2010 will drag and drop the spot price of potash fertilizer to about 2,500 to 2,600 yuan / ton, in the past two days, the compound fertilizer plant has no strong intention to purchase.

Since the fourth quarter of 2008, the price of potash fertilizer has been declining, which has put pressure on the domestic stock market of salt lake potash, which has forced potash production. Guannong shares have digested inventories. Guannong shares disclosed in the 2009 third quarterly report that the company's shareholding company-SDIC Lop Nor Potash Co., Ltd. was affected by the economic crisis, and its domestic sales volume and sales price decreased compared with the same period of the previous year, which had a great impact on the company's profits. The salt lake potash fertilizer issued an announcement in May 2009, announcing that the company's average sales price of potassium chloride tax will be raised or lowered by about 10% in 2008 based on the average sales price of 3670 yuan / ton.

Excess inventory has become a common problem for potash fertilizer manufacturers at home and abroad. Therefore, it has become the unanimous attitude of potash fertilizer manufacturers at home and abroad by drastically lowering prices to drive demand.

Salt Lake Potash had planned to produce not less than 200 tons in 2009 and sell 200 to 250 tons. However, according to the prediction of CICC, the sales volume of salt lake potash fertilizer in 2009 was 120 tons to 170 tons, and the sales volume in 2010 was about 265 tons.