Rotterdam (The Netherlands): The prices of Potassium Nitrate witnessed an upward trend during November 2023. The latest increase in prices was mainly attributed to high demand from the downstream industries as the procurements remained high. Additionally, upstream prices have also risen, fuelling bullish market sentiments for Potassium Nitrate manufacturers. The factors considered for the anticipated November increase include heightened purchasing activity and rising import prices.

The European Economy has been in the doldrums in 2023 after the energy crisis of 2022. Several key industries have underlined the same trend particularly European Construction industry. However, fertilizer industry has been silver lining amidst the dark clouds on the European economy.  The demand for Potassium Nitrate-based fertilizers has notably driven market growth. Even with gas prices on the higher side, supporting the rise in prices. Meanwhile, LNG procurement have been completed inside the scheduled forecast period keeping the European winter in the background.

Market fluctuations in Potassium Nitrate prices can be observed in the last two months, with November seeing a slight rise and Potassium Nitrate prices are expected to decline in December 2023 amidst limited market activities in the backdrop of holidays and severe winter. For December, the slight decrease in Potassium Nitrate prices was due to upstream prices easing during the destocking season. Another major factor was the decrease in dollar strength.

The Eurozone is still facing headwinds as confidence among investors and consumers remains weak both at home and abroad. According to economists, encouraging policy measures, budget adjustments, and the resumption of rate cuts have been supportive and are expected to remain so.

On the supply side, material availability has been moderate with market participants reporting ample inventories.  Furthermore,  markets are watching the US central bank meeting for clues on interest rate policy. The Middle East conflict has also caught attention, with signs of further escalation raising concerns about upstream supply disruptions. Global initiatives to improve agricultural activity have been the primary trend in the market, with increasing demand for climate-neutral EU-based fertilizers.

Furthermore, it is expected that the demand for Potassium Nitrate in the fertilizer industry will start increasing in quarter 1 of 2024 and will specifically rise in the second half of the year. Market activity is anticipated to be in full swing during the sowing season in the US and Asia, leading to increased procurement of potassium nitrate by the fertilizer industries. Meanwhile, the energy prices are expected to strengthen further in Q1 2024 underlining the improvement in downstream Potassium Nitrate prices with increase in production cost.