In the first half of this year, China's potassium fertilizer supply was sufficient and demand improved, achieving a good momentum of "three growth" in production, supply, and sales. This is the information uploaded from the 2024 China Potash and Potassium Fertilizer Industry Technology Exchange Conference and Molten Salt Energy Storage Industry Development Forum held in Hohhot, Inner Mongolia on August 19th.
Wang Xiaofeng, President of the China Inorganic Salt Industry Association, pointed out that the world is currently undergoing a great transformation that has not been seen in a century. The changes in the world, the times, and history are unfolding in unprecedented ways, and regional hot issues are emerging one after another. Under the impact of various "changes", the safe and stable supply of food is an important foundation and support for maintaining social stability and normal economic operation. Fertilizer, as the "grain" of food, plays an important role in maintaining national food security. The instability of the global fertilizer supply chain has had a serious impact on food security in various countries and has also had a significant impact on China's potassium fertilizer industry.
In recent years, the overall supply and demand of potassium fertilizer in China have fluctuated greatly due to various factors, but the government has continued to implement multiple measures to ensure supply and stabilize prices. Domestic potassium fertilizer production and demand have remained at a high level, and by 2023, China's potassium fertilizer consumption will reach its highest level in recent years. According to statistics, in the past five years, the domestic potassium fertilizer conversion rate has remained stable at over 5 million tons, and China's annual demand for potassium fertilizer is about 12 million tons or more, with a foreign dependence rate of over 50%. In 2022, domestic potassium fertilizer production enterprises such as Qinghai Salt Lake, Guotou Luo Potassium, and Zangge Potassium Fertilizer actively tapped their potential, with production increasing to 5.8 million tons (calculated as potassium oxide) that year and stabilizing at 5.17 million tons in 2023. Large potassium fertilizer enterprises have shown their responsibility and dedication. Import service enterprises such as Zhongnong and Sinochem, as well as border trade service enterprises such as Tianyu Huijing, Migao Group, and Beifeng Group, operate international market resources. In 2023, the net import volume of potassium fertilizer will approach 7 million tons, effectively ensuring the use of potassium fertilizer for spring plowing in 2024.
Wang Xiaofeng emphasized that in recent years, international trade frictions and logistics issues have further intensified the difficulty of importing potassium salt. The global supply chain crisis has not only affected the stable supply of potassium salt, but also exposed the insufficient independent supply capacity of China in this field. This is not only a matter of resources themselves, but also requires support from policies and management. Overseas development of potassium resources is one of the important ways to solve the shortage of potassium resources in China. The association is also actively reporting to relevant national departments, striving to guide enterprises to orderly promote the development of overseas potassium resources at the national level and solve related problems encountered in the development process. A group of domestic enterprises actively participated in the "the Belt and Road" initiative, implemented the "going out" strategy of potash fertilizer, and searched for potash resources abroad. In recent years, China has also made breakthroughs in the development of potassium resources overseas. At present, the overseas "potassium search" projects of Chinese enterprises involve 10 countries and regions including Laos, Thailand, Congo (Brazzaville), Eritrea, etc. Several Chinese companies have obtained potassium ore resources in Laos, with a production capacity of 5 million tons per year for potassium chloride. Qinghai Salt Lake, Guotou Luo Potassium, and Zangge are actively developing resources abroad. According to existing planning and design, the annual production capacity of potassium chloride in China's overseas potassium resource development projects is expected to reach 7-10 million tons by 2030.
Yan Hongwei, Secretary of the Party Committee and Chairman of Qinghai Salt Lake Industry Co., Ltd., and President of the Potassium Potassium Fertilizer Industry Branch of China Inorganic Salt Industry Association, pointed out that food is paramount to the people, and food is essential to ensure the safety of the world. China's grain production has remained stable at over 1.3 trillion catties for nine consecutive years. It is the glorious mission and responsibility of the potassium and potassium fertilizer industry to firmly hold the Chinese people's rice bowls in their own hands. At present, increasing grain production has entered a bottleneck period. Increasing production, optimizing production, and ensuring high yield are national strategies. Stabilizing prices, stabilizing the market, and ensuring supply are the responsibilities of the industry. The agricultural stable production industry cannot be absent.
In the first half of 2024, China's potassium fertilizer supply is sufficient and demand is improving. The physical production of potassium fertilizer is 4.58 million tons, a year-on-year increase of 5.6%; Imported 6.53 million tons of potassium fertilizer, a year-on-year increase of 24.1%; The apparent consumption of potassium fertilizer is 11 million tons, an increase of 17.3% compared to 2023, achieving a good momentum of growth in the production, supply, and sales of potassium fertilizer. Due to fluctuations in market prices and the decline in international market prices, the revenue and profit of the potassium fertilizer industry decreased by 17.0% and 54.4% in the first half of this year. Wan Hongwei stated that the main challenges facing the future development of the industry are the sustainable development and efficient utilization of limited domestic resources, the response to the complex international situation of imported potassium fertilizer, the speed of overseas potassium fertilizer development, and price fluctuations under market supply and demand games.
In order to ensure food security and stabilize the domestic market, potassium fertilizer trading enterprises have made arduous efforts in the past three years and played a role in the negotiation mechanism of major contracts. The bulk contract price for potassium fertilizer imports in China in 2022 is $590/ton CIF price, while the highest CIF price for Brazilian granular potassium increased to $1200/ton that year; In 2023, the price was reduced to 307 US dollars per ton, and this year it has decreased by 34 US dollars compared to 2023, maintaining the advantage of a global potassium fertilizer "price depression". Wan Hongwei stated that we should continue to promote the linkage between China and friendly partner countries in potassium resource development and potassium fertilizer trade, forming a comprehensive and multi-level cooperation pattern; To utilize the strong supplement of imported potassium fertilizer from border trade to the production needs of surrounding farmers, and stabilize the domestic potassium fertilizer market during the peak demand season; We need to conduct an analysis of the situation of potassium fertilizer import trade, coordinate the total amount of imported and domestically produced potassium fertilizers, utilize China's potassium fertilizer contract negotiation mechanism to grasp the pace of imported potassium fertilizers, and coordinate the planning of "two resources, two markets".
Zhang Douqun, Deputy Secretary of the Party Committee and General Manager of Guotou Xinjiang Lop Nur Potash Co., Ltd., stated that as the world's largest single potassium sulfate production enterprise, Guotou Lop Nur Potash Co., Ltd. always remembers the "greatness of the country", takes serving national strategies and ensuring food security as its mission, adheres to scientific and technological innovation, continuously reforms and develops, relies on its own scientific and technological strength, draws on domestic and foreign experience in salt lake development, combines industry, academia and research, and collaborates with multiple disciplines to overcome various difficulties and overcome the world's difficult problem of producing potassium sulfate from the sub type brine containing potassium magnesium sulfate in Lop Nur. It has built production facilities with an annual output of 1.5 million tons of potassium sulfate and 100000 tons of potassium magnesium sulfate fertilizer, and has produced more than 23 million tons of potassium sulfate, making positive contributions to the supply of fertilizers and food security for the country.
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