According to the Zhongjin Finance APP, Zhongjin released a research report stating that the import contract price for potash fertilizer in 2024 is CFR273 per ton, and the corresponding domestic market price with tax is about 2,300 yuan per ton; considering the supporting effect of the import contract price for potash fertilizer and the gradual entry into the peak fertilization season, I am bullish on the maintenance of domestic potash fertilizer prices. With the entry of the peak fertilization season in the second half of the year and the signing of large contracts by China and India, and considering the limited new production capacity in the medium term, potash fertilizer prices and demand are expected to remain stable. It is recommended to pay attention to domestic stock potash fertilizer leading companies and companies with incremental presence overseas in the future.

In the second quarter of 2024, global potash fertilizer sales showed a trend of price reduction and quantity increase. According to the announcement: 1) Nutrien: demand outside North America has increased, but the sales volume has decreased due to the delay of the planting season in North America. The sales volume of potash fertilizer in the second quarter of 2024 was 3.6 million tons, +5% year-on-year; the average price in the second quarter of 2024 was 212 US dollars per ton, -29% year-on-year. 2) Mosaic: achieved potash fertilizer sales of 2.35 million tons in the second quarter of 2024, +8.5% year-on-year; the average price was 224 US dollars per ton, -31% year-on-year. 3) Qinghai Salt Lake Industry: achieved potash fertilizer sales of 1.47 million tons in the second quarter of 2024, +66%/93% year-on-year; the average sales price in the first half of 2024 was 2,383 yuan per ton, -18% year-on-year. 4) Asia-Potash International Investment: achieved potash fertilizer sales of 0.563 million tons in the second quarter of 2024, +88% quarter-on-quarter; the average sales price in the first half of 2024 was 1,972 yuan per ton, -25% year-on-year.

Demand side: Crop prices in many regions are still above the average level of the past 10 years, and Nutrien has raised its full-year demand forecast to 69-72 million tons. According to Nutrien's announcement, the company raised its global potash fertilizer shipment forecast mainly due to: grain stocks are still tight, and despite the downward trend in crop prices, the company expects strong agricultural investment in North America in the third quarter of 2024; the profit margin of soybeans in Brazil is higher than the level in 2023, and the growth of 1-3% planting area will drive the stable demand for fertilizers; the affordability of potash fertilizer and the recovery of prices of palm oil and other commodities will drive the increase in demand in Southeast Asia, with a significant year-on-year increase in the import volume of potash fertilizer in Indonesia and Malaysia.

Supply side: Russia/Belarus has basically recovered to the level of 2021, and the global new production capacity in 2025 is limited with tight supply and demand. According to Nutrien's announcement, the annualized production of potash fertilizer in Russia in the first half of 2024 is expected to be around 15 million tons, which has recovered to the level of 2021; the annualized production of potash fertilizer in Belarus is expected to be around 11 million tons, with only a million-ton level gap compared to 2021. It is believed that the short-term production capacity of Russia and Belarus may have almost fully recovered, and there is limited incremental capacity in the future. In addition, from the perspective of new production capacity, according to incomplete statistics from Zhongjin, the new production capacity in 2024-2025 is mainly concentrated in Laos, and there is limited new capacity in the medium term. I am bullish on the sustained prosperity of the potash fertilizer industry.

Risk factors: The recovery of potash fertilizer demand is lower than expected, and the volatility of commodities affects the price of potash fertilizer.