Potassium Chloride prices in the German market have remained fragile due to lackluster consumer demand. In the upstream potash market, prices somehow maintained a steady position in most regions amid sluggish demand and lackluster trading activity. In many South Asian markets, the focus was on digesting the recent Potassium Chloride contract settlements in China and India, while the domestic Chinese market began to weaken and lose momentum.

In China, expectations of increased supply of Potassium Chloride following the recent contract settlements including the 2024 potash contract, cross-border contract, and China-Europe train contract put downward pressure on port prices in the market. Additionally, China's Potassium Chloride imports surged to 6.5 million tonnes in the first half of the year, marking a 24% increase and reaching a record high, according to customs data. Meanwhile, Potassium Chloride prices in other Southeast Asian markets remained unchanged as the new contracts had little immediate impact. However, market participants anticipate that Potassium Chloride prices could be affected in the near term. The outlook for potash prices suggests stability in Brazil, but further price pressure is expected in Southeast Asian markets.

However, the purchasing activity of Potassium Chloride from the downstream fertilizer industry has remained dampened in Europe. The drop in demand for Potassium Chloride is largely due to adverse weather conditions, including intense heat waves followed by tropical storms, which have jeopardized crops. As a result, consumers have taken a cautious, wait-and-see approach to procuring fertilizers, limiting their purchasing activity.

Additionally, the World Bank's fertilizer price index remained stable in Q2 2024 after a 20% drop in Q1, now 24% lower year-on-year due to significant declines in phosphate rock (-56%) and potassium (-17%) prices. Fertilizer prices in 2024 and 2025 are expected to average lower than in 2023 but stay above 2015-19 levels due to strong demand and export restrictions. Potential increases in input costs, especially natural gas, pose upside risks, while resumed exports from China and lower crop prices could lead to further price declines.

Also in recent developments, Russia emerged as a major exporter of fertilizers including Potassium Chloride that has not been subjected to sanctions. According to a report, potash exports from Russia increased by 70% year-on-year in the first half of 2024. Potash fertilizer exports from Russia surged to 6.7 million tonnes in the first half of the year, marking a 1.7-fold increase compared to the same period last year, as per data. This represents the strongest growth in six months. Exports to Europe are also on the rise, fueling concerns about the EU's increasing reliance on Russian fertilizers. Analysts noted that EU imports of these fertilizers rose 1.7-fold year-on-year to 1.9 million tonnes between January and May 2024.

The supply of Potassium Chloride in the European market remained firm during August. Manufacturing units operated efficiently, ensuring a steady production output that met the increased demand from downstream agriculture sectors. The domestic market within the European Union has been significantly impacted by adverse weather conditions recently, including excessive rainfall across Austria, France, Italy, Germany, and the Netherlands. The unpredictable weather has introduced considerable uncertainties in agricultural activities, thereby influencing the demand for Potassium Chloride. Farmers and agricultural stakeholders in the affected regions have struggled to manage crops due to the harmful effects of excessive rainfall, leading to a reduced immediate need for Potassium Chloride as a fertilizer.

As per the pricing team at the ChemAnalyst, with ample stocks and supply, coupled with slow demand, prices are expected to decline in the coming weeks. However, some market participants remain optimistic about the future.