China's potassium hydroxide price trend in the second half of 2023

The main raw material in the manufacturing cost of potassium hydroxide is potassium chloride, which accounts for 50% to 70% of the cost of potassium hydroxide. Electricity consumption, steam consumption, labor, packaging, etc. are basically stable in a certain period of time, so the rise and fall of potassium chloride Directly affects the production cost of potassium hydroxide.

In the first half of 2023, due to the expected decline in the price of potassium chloride in China, various potassium hydroxide manufacturers have cleared their inventories, resulting in a steady decline in potassium hydroxide prices in the first half of this year. Especially with the completion of large-scale trade negotiations in May, the transaction price is expected to The price of potassium hydroxide dropped in a panic by more than 1,000 yuan/ton in May.

In the first half of the year, the transaction price of potassium chloride fell by about 1,100 yuan/ton, while the transaction price of potassium hydroxide fell by about 2,300 yuan/ton. The drop in potassium hydroxide was much higher than the drop in costs caused by the drop in potassium chloride prices.

As the price of imported potassium chloride was finalized on June 7, the "boot" that suppressed the decline of potassium chloride, the raw material of potassium hydroxide, came into effect. The price of potassium hydroxide first stopped falling from liquid products, and then appeared in late June. Signs of solid potassium hydroxide bottoming.

Hosea Chem management team predicts that the potassium hydroxide market will be weak in the short term in the second half of 2023, and potassium hydroxide will adjust slightly upward in the fourth quarter.

Judging from the cost of potassium chloride, the main raw material, there is not much room for the price of potassium chloride to fall again in the second half of this year. The cost aspect has supported the price of potassium hydroxide from plummeting in the first half of the year.

From the analysis of potassium hydroxide peers, as various production companies currently experience large-scale losses, the cash flow of each loss-making company will have different problems. In the third quarter, it is inevitable that each loss-making company will reduce production, overhaul, switch production, and even suspend production for a short period of time. Potassium supply will not increase in the short term.

From the perspective of downstream demand for potassium hydroxide, with the current low price of potassium hydroxide, the manufacturing costs of downstream companies will be reduced, thereby increasing consumption in some downstream markets. When the prices of various dealers are stable, social inventories are gradually transferred from potassium hydroxide production enterprises to dealers and downstream enterprises.

It is expected that the domestic sales price of potassium hydroxide in China will rise slightly in the third quarter and remain at 7,000 yuan to 8,500 yuan/ton in the second half of the year.