By Hu Tianyi, CNCIC
Potassium nitrate (KNO3) is a high-quality chlorine-free nitrogen potassium binary compound fertilizer and an inorganic chemical product. It can be divided into industrial grade and agricultural grade by the specific application. Industrial grade KNO3 is raw material for the production of black powder and it can also be used in the fields of fireworks, glass clarifier, medicine, low-temperature storage molten salt and solar energy storage. Mainly used as fertilizer, agricultural grade can be applied directly to soil or made into high-end water-soluble compound fertilizer and special fertilizer.
Capacity
The demand for KNO3, especially agricultural grade, has been increasing in China in recent years. Therefore, the domestic KNO3 market is developing fast. In 2019, the domestic capacity reached 2.458 million t/a, with the capacity of a single production line hitting up to 100 000 t/a.
KNO3 production is mostly made by potassium chloride but China is short of sylvine resources. Domestic potassium chloride capacity is concentrated in Qinghai and Xinjiang, where are abundant in sylvine resources. In addition, China imports a large amount of potassium chloride every year to meet domestic demand. In 2019, the import dependency reached 48.5%. The capacity of KNO3 - a processing-type potassium fertilizer, is widely distributed, and there are producers in Shandong, Qinghai, Hunan, Shanxi, Jiangxi, Sichuan and Yunnan provinces. Among them, Qinghai Salt Lake and Wentong Holding are the largest producers, both with a capacity of 300 000 t/a. The capacity of Zhejiang Lianda Chemical, Jiangxi Jinlida Potassium Co., Ltd. and Jiaocheng Bingsheng Chemical also reach more than 200 000 t/a.
Sharply increased export volumes
China is a net exporter of KNO3, while it reports a small number of imports. The import volume was 23 000 tons in 2015, and fell to below 10 000 tons afterwards. The export volume of KNO3 has increased greatly since 2017 with an increase in domestic output. Figure 1 shows the import and export of KNO3 in China from 2015 to 2019. In terms of the provinces exporting KNO3, Shandong was the largest exporter in 2019, accounting for 40% of the total exports of the year, followed by Shanghai, Sichuan and Zhejiang. Southeast Asia and South Asia have always been China's traditional destinations, accounting for 38% of China's exports to Asia, followed by Africa, accounting for 20%. Europe, Oceania and Latin America take up 11%-15% on average. The export volume to North America is the smallest, occupying only 4% of the total.
Demand to keep growing
Around 75% of KNO3 is used in agriculture in China. Compound fertilizer for tobacco is the biggest derivative of KNO3, accounting for 45% of the total consumption. Consumption of agricultural KNO3 is relatively concentrated in Southwest China. So far, the domestic nitro fertilizer, water-soluble fertilizer and other new fertilizer products have been gradually accepted by downstream users. KNO3 is featured with strong solubility, no volatility and rapid absorption of nutrients by crops. It can be applied directly on the surface of soil without covering. It is suitable for crops in all seasons, and it has huge demand in areas short of water. However, the price of KNO3 is much higher than that of common N-K compound fertilizer, so some growers may consider using cheap potassium sulfate and common compound fertilizer as alternatives.
The demand for KNO3 in the industrial sector remains stable at about 25%. The demand in the fireworks industry has decreased, but the demand for photothermal molten salt will drive up the needs for industrial KNO3. Among the first 20 demonstration projects of solar thermal power generation in China, 18 of them adopt molten salt to store energy. In general, a project of 50KWh solar thermal power generation requires 16 000 tons of molten salt, and if calculated according to the current binary molten salt system (60% of sodium nitrate, 40% of potassium nitrate), KNO3 will account for 40%.
In a nutshell, both the agricultural and industrial demand for KNO3 will increase, especially the former. With the changes in Chinese planting structure, agricultural planting will be more professional, standardized and efficient. As a result, the demand for high-end fertilizer will strengthen. Land will be more centralized given the implementation of rural urbanization and land transfer. The faster integration of water and fertilizer will push up demand for water-soluble fertilizer. In addition to the demand from the tobacco specific fertilizer sector, there is a huge demand potential for KNO3 in domestic high-end commercial crops (including tea, flowers, and fruits) sector. Therefore, it is expected that the demand for agricultural KNO3 will continue to grow in the future. As for the industrial application, with the progress in photothermal molten salt projects in China, the demand for KNO3 will increase. At present, China's solar thermal power generation industry is still in its infant step, and in the future, photoelectric station projects will be boosted by related policies. In addition to domestic solar thermal projects, the global demand for industrial KNO3 will lend support to the development of domestic KNO3 industry in China. Accordingly, it is expected that China's KNO3 market will keep growing in the future.
