1、 Market Overview
This week, the domestic potassium chloride (imported) market has ended its previous downward trend and shown a trend of stabilization and recovery. According to data monitoring by Business Society, as of June 5th, the benchmark price of potassium chloride (imported) was 3583.33 yuan/ton, an increase of 0.47% from 3566.67 yuan/ton at the beginning of this month (June 1st). Although the end of spring plowing demand has led to a low willingness to prepare agricultural fertilizers, the low inventory at ports and the finalization of international contract prices have provided strong bottom support for the domestic market.
2、 Technical analysis of spot market in Shengyi Society
Based on the average deviation indicator and price position analysis tool provided by Business Society’s spot trading platform, the following is an interpretation of this week’s trend:
1. Change in Mean Deviation:
From the recent 5-day trend chart, it can be seen more clearly that although the 20 day moving average (blue line) is still showing a slow downward trend, the solid line representing short-term prices and the 10 day moving average (red line) have shown significant rebound, indicating that short-term buying power is accumulating and the downward trend is being contained.
2. Location analysis:
According to the table data, although it is at a high level in the short term, it is still at a “medium” and “low” level at the “60 day level” and “90 day level”. This means that from a longer-term perspective, the current price has not deviated from the reasonable range and there is still room for repair. However, it also suggests that there may be pressure to lock up the market in the early stage.
3、 Analysis of Fundamental Driving Factors
The supporting logic of the market this week mainly stems from structural tension on the supply side:
1. Demand side: With the basic end of spring plowing and fertilizer use, the agricultural market demand has entered a window period. The operating rate of compound fertilizer enterprises is less than 40%, and industrial procurement is limited to small orders for essential needs, resulting in a sluggish overall trading atmosphere and limiting the significant increase in prices.
2. Supply side: Port inventory has dropped to a low level, and the replenishment of new goods is slow, resulting in a tight supply of goods in the market and a strong willingness of holders to raise prices. The annual potassium fertilizer contract price in India has been finalized, establishing an upward shift in the international potassium fertilizer pricing benchmark. This news directly boosted market confidence, suppressed the downward space of domestic prices, and solidified the bottom of prices.
4、 Future forecast
Overall, this week’s potassium chloride (import) market has shown characteristics of “high-level consolidation and slight rebound” under the game of supply support and weak demand: the price has remained stable at the 3580 yuan/ton mark, the moving average system has stabilized, and it is difficult to break through the pressure level of 3600 yuan/ton in the short term; In the medium to long term, the downward space is limited due to low port inventory and international price support.
Short term forecast: With the establishment of a signal for the moving average to cross, prices are expected to maintain a strong trend in the short term. However, due to the lack of agricultural demand and insufficient driving force for a significant increase, it is expected to dominate with a narrow range of fluctuations.
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