By Qi Zhaoying, General Secretary of Potash Fertilizer Department of Chemical 

Fertilizer Special Committee of China Chemical Industry Society

At present, China's potash fertilizer is still in the "three pillars" pattern of domestic potash fertilizer, imported potash fertilizer, and overseas potash fertilizer. However, many certain and uncertain changes took place in 2021, which had a greater impact on the operation of the potash fertilizer industry. In 2021, the price of potash fertilizer has experienced a strong upward trend, and domestic production has also reached a long-anticipated inflection point. In the future, China's potash fertilizer industry should take multiple measures to regain the right to speak in pricing and achieve sustainable development.

It is more and more difficult to maintain the self-sufficiency rate of domestic potash fertilizers at 50%

China's soluble potassium resources are very poor, with more than 98% distributed in remote areas such as Qinghai and Xinjiang. As can be seen from Figure 1, in the past ten years, the state has invested a lot of manpower and material resources, but the increase in the amount of identified resources is limited. From the results reported in recent years, it can be seen that China's potential potassium resources are mainly in deep brine and solid potash. Considering the technical difficulty of mining these resources and the high cost of mining and processing, there is still a long way to achieve industrialization. China's potash fertilizer has long relied on imports. The analysis of the current situation of supply and demand and the trend of self-sufficiency rate are shown in Figure 2 and Figure 3. The self-sufficiency rate of 50% is a good "organic" data. However, it will be more and more difficult to maintain a self-sufficiency rate about 50%!

Figure 1 Changes in China's potash resources

Figure 2 Analysis of the current situation of potash fertilizer supply and demand       in China (taking 2021 as an example) (in 10 000 tons of KCl)

Figure 3 China's potash fertilizer self-sufficiency rate from 2010 to 2021

The main potash fertilizers and potash chemical products in China are mainly divided into the following three categories, which are resource-based potash fertilizer products: potassium chloride, resource-based potassium sulfate, potassium-magnesium sulfate fertilizer, silicon calcium potassium-magnesium fertilizer (soil conditioner); processed potash fertilizer products: potassium nitrate, processed potassium sulfate, potassium dihydrogen phosphate; potassium fine chemical products: potassium carbonate, potassium hydroxide, potassium pyrophosphate, food grade potassium chloride, potassium chlorate.

As can be seen from Figure 4, the output of domestic potash fertilizer has increased from 5.3 million tons in 2010 (equivalent to KCl, the same below) to 9.2 million tons in 2020, and the average annual growth rate from 2015 to 2020 was only 0.37%. The potash fertilizer production began to appear "stagflation". Six years later, the output of 8.79 million tons in 2021 finally broke the 9 million tons point, and the inflection point has finally appeared.

   Figure 4 Summary of main data trends of potash fertilizers in China from 2010 to 2021

The varieties of potash fertilizers that China needs to import in large quantities are only the varieties of potassium chloride caused by the lack of resources, and the production process requirements of potassium chloride in the future will also have higher requirements due to different application fields.

The overall development trend of apparent consumption of potash fertilizer in China has been increasing. The processed potassium sulfate and potassium nitrate enterprises need to work hard in the extension and diversification of the industrial chain, otherwise they will become more and more passive.

Import situation

Presently, China's potash fertilizer import mechanism mainly includes two ways: large contract import (sea transportation) and border trade import (land transportation).

In 2020, China imported a total of 8.7398 million tons of potassium chloride, and from January to November 2021, it imported a total of 7.2755 million tons. Sources of imports in 2020 and 2021 are 11 countries. For details of the top three trading partners by import volume from January to November in 2021 and 2020, see Tables 1 and 2.

"Going out" projects have reached 27

In 1998, with the support of national leaders and policies, the "going out" journey of potash started. Currently, there are 27 projects in 11 countries (34 projects in 12 countries at the peak) in progress, with a total planned production capacity of 19.47 million t/a, including Canada, Laos, Kazakhstan, Congo (Brazzaville), Thailand, Ethiopia, Pakistan, Morocco, Djibouti, Jordan, Argentina. These 27 overseas potash fertilizer projects are in different stages. At present, 4 Lao enterprises have produced high-quality potassium chloride products. It is expected that in the next three years, 3.25 million to 4 million t/a units will be completed and put into operation.

Three measures to promote sustainable development

The sudden outbreak of COVID 19 has made the world realize the importance of self-sufficient food supply. From a domestic point of view, with people's awareness of "soil health - healthy ingredients" and the popularization of "formulated fertilizer" and "organic fertilizer" applications, more and more people will realize the importance of potash fertilizers to crops. It is estimated that the apparent consumption of potash fertilizer in China will still exceed 20 million tons in the next five years.

With the rise in the prices of agricultural materials such as potash fertilizers, people's awareness of seeking alternatives such as potash fertilizer varieties with low potassium content or multi-element mineral conditioners will become more and more intense.

For a long period of time in the future, the sustainable development of China's potash fertilizer industry should start from the following three aspects:

Firstly, protect the precious domestic soluble potassium resources. The deficiencies are made up through three channels: the development of foreign potash fertilizer bases, the import and the development of insoluble potassium resources.

The second is to develop domestic soluble potassium resources on a scientific and reasonable scale. Judging from the actual endowment of China's potash resources, the new production capacity of domestic potash fertilizer should be strictly controlled, and the output should be maintained at the level of 6 million to 7 million tons per year. At present, the existing potash fertilizer plant capacity in Qinghai and Xinjiang of China has reached the limit scale of the existing resources. For the sustainable development of the domestic part of the potash fertilizer industry, it is recommended to build or expand resource-based potassium chloride, potassium sulfate and potassium-magnesium sulfate fertilizer projects to improve the utilization rate of existing equipment; develop innovative products that save potassium resources base on the goal of healthy soil; prepare adequately for the resource dilemma faced by the enterprise.

The third is to actively promote overseas potash fertilizer projects. It is suggested that with the support of national policies, capable investment and financing institutions and enterprises with potash elements should unite to establish a special investment fund, increase the layout of existing overseas potash fertilizer bases, actively promote the construction speed, and connect with existing overseas potash fertilizer base projects.