Potash Fertilizer Producers Benefit from Import Price Rise      

It is defined in the 2008 import contract for potash fertilizer that the FOB price of potash fertilizers will be increased by US$400 per ton on the basis of around US$180 per ton in 2007. That is to say, the 2008 FOB price of potash fertilizers will reach US$580 per ton, an increase of 2.22 times compared to the previous year. The first shipment under the new contract will be delivered to China in May or June. As a result, the price of potash fertilizers in the domestic market will increase greatly and potash fertilizer producers and dealers in China will reap fat profits.
   According to well-informed sources, Sinochem Corporation has already signed a contract with Canadian firms on importing 1.0 million tons of potash fertilizers. Contracts on importing 1.0 million tons of potash fertilizers will also be signed with Russian and Belarus firms. The total import amount of potash fertilizers will be 2.0 million tons in 2008.
   Based on the contract price of potash fertilizers, the CIF price of potash fertilizers will be around RMB5 017 per ton. But the ex-factory price of Qinghai Salt Lake Potash Co., Ltd. (SZ: 000792) is RMB3 700 per ton this April. According to experts, the ex-factory price of potash fertilizers in the domestic market should be linked to the CIF price in the international market.
    "As the National Development and Reform Commission issued a new policy, strengthening the price supervision on potash and compound fertilizers," said a spokesman of Qinghai Salt Lake Potash, the biggest potash fertilizer producer in China, "how the ex-factory price of potash fertilizers will change is still uncertain."
   The end product of Qinghai Salt Lake Potash is potassium chloride, holding 25% market share of the national total and accounting for 80% of the total output in China. The company is building a 100 000 t/a hot melt process refined potassium chloride project, which is scheduled for startup in 2008. Upon completion of the project, the total capacity of potassium chloride in the company will reach 2.0 million tons in 2008, an increase of around 5% over 2007.