Whether adding potassium or not has little effect on potash fertilizer market

BHP Billiton's preparations for the acquisition of Canada Potash Corp.'s news of "adding potassium" is like a pound. It has caused an uproar in the industry. Some people worry that if potassium is purchased, domestic potash fertilizer will fear the mistakes of iron ore. Bargaining power is lost and imports are controlled by people.

However, the Southern Rural Daily reporter recently interviewed many authoritative figures in the industry. They analyzed that since the self-supply rate of potash fertilizer in China has increased year by year, plus a certain surplus of international potash fertilizer supply in the future, therefore, whether or not potash will be acquired for China Potash market trend has little effect.

Even so, several questions raised by this incident are still attracting attention.

1. Will potassium be purchased or not?

It is understood that Canada Potash Corp. is currently the world's largest potash fertilizer manufacturer. At present, it has at least 10 million tons of potash fertilizer capacity per year, accounting for more than 20% of global production capacity.

On August 18, BHP Billiton announced that it plans to acquire Canadian Potash Corp’s entire issued common shares at US$130 per share in cash. For a time, ** Suddenly, especially in China where the dependence on potash fertilizer is as high as 60% or more, it is even more tense.

“If BHP Billiton acquires potassium, it will surely become a victim of its monopolistic profits.” A person in charge of a leading domestic compound fertilizer company said that as a company that started with iron ore and has taken huge monopoly profits in this market, The involvement in potash is definitely trying to seek higher monopoly profits.

This view has been recognized by many people in the industry. Many people are concerned that China's potash fertilizer will fear the mistakes of iron ore. China's relevant departments are not allowed to sit idly by. Therefore, Sinochem Group is unwarrantedly involved in the acquisition of potash.

However, after a round of media hype, whether BHP Billiton or Sinochem Group, or other companies in India, Brazil, etc., have no further acquisition actions and intentions, will the world’s largest potash fertilizer company be acquired , has become a mystery temporarily puzzling.

Analysis of the industry, adding potassium is not impossible, but it is quite difficult. “The key is to see how much money can be made and whether they can be impressed.” One person analyzed that, in the absence of follow-up actions by each of the acquirers, the acquisition may be grounded, and it is difficult to succeed at least in the short term.

2. How does the potash bargaining power change?

What many people in the industry are worried about is that once potassium is purchased, the bargaining power of imported potash in China will be lost and it will be even more subject to people.

However, many people also think that worry is redundant. “Even if potassium is added, it will not have much impact on the potash fertilizer market in China.” Zhu Li, deputy general manager of China National Agricultural Group Holdings Co., Ltd. analyzed that although about 60% of the potash fertilizer in China’s market is from Canada and Russia, Israel and other countries imported, but the import volume from potassium increased, and the combined amount signed last year was 420,000 tons, while the actual trade volume in border trade was almost zero.

Similarly, an executive from the China Potash Industry Branch of the China Inorganic Salt Industry Association said in an interview with reporters that the key to influencing the potash's discourse power lies in the self-sufficiency rate of potash fertilizer in China. If potassium is added by BHP Billiton, it only means that more than 20% of the world's potash resources are used. The "home" was changed from potassium to BHP Billiton, which has no direct impact on China.

“However, it is worth noting that Russia’s two potash fertilizer companies have merged. It is worth paying attention,” said Zhulian. At present, most of the potash fertilizer imported from China comes from Russia. For example, a contract of 1 million tons was signed last year and border trade was more than 2 million tons. The two companies are There are price competitions in China's potash fertilizer trade. If they are merged, they will inevitably affect our discourse power for potash fertilizer price negotiations.

According to the "Financial Times of the UK," the Russian government-backed metal industry oligopoly Suleyman Klimov will acquire a majority stake in potash producer Silvinet and merge it with Ural Potash Corp listed in London. The Chillvine and Ural Potash Corps are the two largest producers of potash in Russia. Their merger will create the world’s second largest potash producer after potassium, which will be worth US$20 billion. The capacity will reach 11.5 million tons.

3, China's potash fertilizer industry go from here?

Industry analysts believe that although the merger of BHP Billiton's acquisition of potassium and Russia's two largest potash producers has not yet come into being, the global concentration trend of potash fertilizer resources is becoming increasingly apparent. Under this trend, where should the Chinese potash fertilizer industry go?

“Even if the global potash fertilizers are combined, China’s potash fertilizer will not be controlled by others.” The above-mentioned senior officials of the potassium salt branch pointed out that as China has long been aware of the importance of potash fertilizer and has begun to expand potash fertilizer production both at home and abroad, the domestic potash fertilizer supply is increasing year by year. Promote. China Inorganic Salt Industry Association statistics show that after the conversion of potassium oxide, the output of potash fertilizer in China was 3.207 million tons in 2009. Similarly, the import volume was 1.249 million tons. The annual consumption was about 6 million tons, and the self-sufficiency rate exceeded. 51%. “It is estimated that the supply of potassium fertilizer will reach 5 million tons in 2012 and 6.6 million tons in 2015, which will basically meet domestic demand.”

“From the perspective of global potash fertilizer supply, potash fertilizer prices will not increase substantially.” Zhulian said that global potash fertilizer supply actually exceeds global potash fertilizer demand. In 2009, global potash fertilizer output was 43 million tons, while global demand was only 32 million tons. 2010 The annual surplus is estimated at 10 million tons and the surplus will continue for the foreseeable future.

In addition, Zhao Zhaoying, executive deputy secretary general of the Potash Fertilizer Industry Branch of the China Inorganic Salt Industry Association, stated that with the gradual production of some large projects, the self-sufficiency rate of potash fertilizer in China will continue to increase, and with the acceleration of the pace of going abroad, the supply of potash fertilizer in China will be increased. The capacity has formed its own scientific scale and the layout has become more and more reasonable. The situation has improved compared with previous years, and the production, market and demand have become more rational.