US Potassium Chloride Prices Rise on Account of Strong Fertilizer Demand

Tightness in the US Potassium Chloride markets resulted in increased prices of feedstock Potash. Strong demand from downstream fertilizers also appears as the US prepares for fall wheat planting and 2023 acreage decisions. The rise in fertilizer prices affects the economy, causing further suffering to the farmers and increasing production costs and food prices.

The prices of Potassium Chloride surged in the US by 5.8%, as recorded by ChemAnalyst pricing team data, with prices hovering at USD 760/tonne Potassium Chloride Technical DEL Illinois with an escalation of USD 42/tonne. This has caused a decrease in the inventories and lowered stockpiling of Potassium Chloride, boosting consumption from the downstream fertilizers market.

Nutrien Ltd., the largest fertilizer producer, is seeking to follow through with plans to expand the production capacity of Potash and Nitrogen, even though there was a little pullback in Potash consumption due to its rising prices. The cost of Potassium Chloride elevated high; however, Nutrien's sales of Potash in North America and Brazil disappointed investors during the third quarter of 2022.

Despite slumping Potash sales, the Saskatoon-based fertilizer giant intends to increase Potash production in 2022. The company's gross revenue increased by 36% due to higher selling prices of fertilizers and strong results from its retail farm network. The continued supply chain disruptions from the Russia/Ukraine conflict create market-share opportunities for the company, which puts cost pressure on Potassium Chloride.

The labour shortage experienced in the US market has indirectly led to increased productivity as companies have invested more in capital-intensive technologies. This labour shortage in the regional market has led to a rise in wages and investment into the safer workplace in the Potassium Chloride plant areas.