LONDON (ICIS)–The global sulphate of potash (SOP) fertilizer market is slow to change – like its sister, and far larger, muriate of potash (MOP) counterpart. However, the past few years have witnessed the emergence of two regional sources of SOP which have the potential to redraw the international supply/demand map.
These two prospective potash powerhouses could not be more different, with one springing from the boiling sands of western Australia’s Outback, and the other from China’s giant agricultural economy.
‘Potash’ is an umbrella term used for fertilizers with a high potassium content. The most common form is MOP, which is suited to mass-produced crops such as rapeseed.
MOP accounts for 95% of global potash trade, amounting to around 69m tonnes/year. The SOP trade is far smaller, at 7-8m tonnes/year. SOP is a chloride-free fertilizer suited to high-cost products like tobacco, fruit and some vegetables.
SOP can be produced through the Mannheim process – which reacts MOP with sulphuric acid – or via brine extraction.
China’s focus is on Mannheim production – although Beijing’s environmental and pollution legislation has tightened in recent years, leading to an explosion of brine extraction projects in the country’s northern reaches.
Meanwhile, brine extraction is the choice of Western Australia’s five biggest SOP prospectives.
Extraction draws salt-rich water from beneath dry lake beds or inland seas, which is then evaporated to leave salts. This salt is then processed into SOP, and shipped around the world.
Of the two suppliers, China undoubtedly has the advantage.
TARIFFS AND TRIBULATIONS
Beijing surprised the long-established international potash trade by announcing the lifting of export tariffs on Chinese SOP, effective 1 January 2019.
Already a large producer of SOP, the move potentially opened the floodgates for a deluge of refined SOP to hit the international market – although early export statistics were less than impressive.
Of course, it wasn’t long until gradually increasing volumes of Chinese SOP were seen in international markets – and this is a trend set to continue, even as the nation retires older Mannheim furnaces.