Resource-based and Processing Potassium Sulfate Enterprises Coexist in China

China’s potassium sulfate products are divided into resource-based and processing types. At the end of 2012, domestic resource-based potassium sulfate enterprises totaled five, boasting a capacity of 1.98 million t/a and producing 1.48 million tons of product that year. Processing firms numbered 42, with 1.9 million t/a capacity and 780 kt output. SDIC Xinjiang Luobupo Potash Co., Ltd (SDIC XLP) produces potassium sulfate with local potash salt resources, while most processing potassium sulfate manufacturers employ the Mannheim method.

1. Resource-based enterprises pay attention to comprehensive utilization

Potassium sulfate units of SDIC XLP were put into production in November 2008, and realized full capacity of 1.2 million t/a in 2011. One year later, the capacity exceeded 1.2 million t/a, reaching 1.37 million t/a currently. SDIC XLP is a sound safeguard for the domestic requirements for potassium sulfate.
   However, to achieve rapid development, capacity expansion is not enough for SDIC XLP, which therefore also gives attention to conserving energy, reducing emissions and developing comprehensive utilization. In the interest of sustainable development of Luobupo potassium resources, SDIC XLP terminated its 600 kt/a second-stage potassium sulfate project. In the future, the company will improve current technologies, increase its capacity by 250 kt/a at most, focus on development of potash magnesium sulfate fertilizers and recycling of low-grade potassium resources.

2. Processing enterprises are to change according to market demand

As the predominant Mannheim technology is relatively mature, market demand and material cost are the two main factors that influence processing enterprises. In the context of a sagging market, Qingshang Chemical (Tianjin) Co., Ltd (Qingshang) and Sichuan Migao Chemical Fertilizer Co., Ltd (Migao) – two representative processing enterprises – maintain relatively high operating rates in 2013, but most small processing firms are hobbled by raw material sourcing and weak demand, so they keep low operating rates or stop production.
   Actually, the domestic potash fertilizer market has been gloomy in the past year. Curbed by high costs, processing enterprises cleared hardly any profit. At the same time, the added value of by-products (hydrochloric acid) is very low. China’s potassium sulfate market faces the problem of overcapacity, which also disturbs industries of nitrogenous fertilizers and phosphate fertilizers. At present, potassium sulfate units using the Mannheim technology are operating at low rates.
   China consumes 1.8-1.9 million tons of potassium sulfate a year. SDIC XLP contributes 1.3 million tons; Qingshang and Migao, 500-700 kt; other enterprises, around 100 kt. As potassium sulfate units that select Mannheim technology boast a capacity of 2 million t/a, Qingshang and Migao can hardly exceed 60-70% operating rates. Small processing enterprises find survival to be even harder, and most of them have suspended production.
   Facing pressure, Qingshang has taken new measures, starting to produce compound fertilizers, the capacity for which is kept at around 400 kt/a. Although there are also challenges in the compound fertilizer market, Qingshang has advantages in the field.

3. New technologies

Potash fertilizers produced by domestic enterprises can meet 50%-60% of national demand. But China’s limited salt lake resources restrict sustainable capacity expansion. Therefore, the country encourages scientific research institutions to develop non-soluble potassium resources and search for new techniques in foreign countries.
   Coexistence of resource-based and processing enterprises is the development trend of China’s potassium sulfate industry. China’s demand for potassium sulfate increases 3-5% annually. As the resources of Luobupo are limited, demand growth has to be met by processing firms.