The potassium sulfate industry is currently facing a severe crisis, with production costs and selling prices out of sync. Many companies have either halted or reduced their production, leading to an overcapacity situation that has become a harsh reality. The industry has already entered a cold phase, and if large-scale enterprises continue to expand capacity while raw material prices keep rising, the sector could soon face a "cold winter." This year, the price of potassium chloride—the main raw material for potassium sulfate—has surged, while the price of potassium sulfate has remained stagnant. This mismatch has created a significant imbalance between production costs and product prices, pushing the entire industry into a deep financial crisis. Zhang Yumei, General Manager of Shaanxi Jingsheng Sulfate Potash Fertilizer Co., Ltd., explained that the company is now producing at a loss. “The retail price of potassium sulfate is 2,250 yuan per ton, while large customers pay 2,200 yuan. However, our actual production cost is around 2,500 yuan per ton, resulting in a loss of about 300 yuan per ton,” she said. Yu Liangming, General Manager of Shandong Liaocheng Santai Chemical Co., Ltd., added that not only has potassium chloride become more expensive, but sulfuric acid—another key raw material—has also risen due to increased sulfur prices. Zhao Zhaoying, Director of the Information Center of the Potash Branch of the China Inorganic Salt Industry Association, noted that since the Spring Festival, potassium chloride prices have been on a steady upward trend. “It started at 1,640 yuan per ton and has now reached 2,200 yuan. The market price of potassium sulfate is still below production costs, and the industry is collectively losing money,” he said. Faced with this situation, some manufacturers have chosen to cut back or stop production, while others are trying to endure. Zhang Yumei mentioned that her company had stockpiled potassium chloride when it was cheaper, allowing them to operate for a while. However, if potassium sulfate prices don’t rise, they may be forced to halt operations. “Many companies have already stopped or reduced production,” she added. Zhai Zhaoying, from the same association, pointed out that stopping production isn’t a simple decision. “Companies are caught between giving up hard-earned markets or enduring pain in hopes of future recovery. Many are relying on the foundation built during previous boom years to survive,” he said. Another challenge comes from the byproduct of hydrochloric acid, which is sold alongside potassium sulfate. Due to transportation limitations, its price varies greatly by region. For example, hydrochloric acid in Shanghai is priced at 300 yuan per ton, while in Shandong it’s only 50 yuan. This inconsistency makes it difficult for businesses to manage their operations effectively. The root cause of the current crisis lies in rising raw material costs. Yu Liang believes that China's lack of potassium chloride resources has forced most companies to import it, mainly from countries like Canada, Russia, Jordan, and Israel. These countries control the supply, leading to continuous price hikes. Zhai Zhaoying emphasized that domestic companies use high-grade potassium chloride, but China’s own reserves are limited and of poor quality. As a result, they must rely on imports, leaving them vulnerable to price fluctuations. “Domestic raw material prices have risen much faster than potassium sulfate prices, leading to widespread losses,” he said. Supply and demand imbalances have also contributed to the crisis. Before 1998, China relied heavily on potassium sulfate imports. After local production began in 1998, the industry grew rapidly due to a favorable price gap between potassium chloride and potassium sulfate. However, by 2006, the installed capacity of potassium sulfate producers exceeded domestic demand, creating a serious oversupply. Despite the challenges, a few large-scale companies with resource advantages, such as Xinjiang Lop Nur Potash Co., Ltd., are faring better. With access to abundant local resources, their production costs are significantly lower, allowing them to maintain healthy profit margins. Zhang Yumei noted that Lop Nur Potash can avoid raw material pressure and sell its products at a 50–70 yuan discount per ton, which negatively impacts other producers. Meanwhile, Yu Liangliang warned that as Lop Nur Potash expands its capacity, competition will intensify, potentially driving prices down further. To ease the crisis, the China Salt Division of the Inorganic Salt Industry has proposed reviving the original VAT exemption policy for potassium sulfate producers, rather than the current VAT refund system. This would help reduce financial burdens. Zhai Zhaoying highlighted that the current VAT refund system, implemented in 2004, has caused delays and inconsistencies. Some companies have accumulated over 10 million yuan in unpaid taxes, increasing operational costs. “We hope the government will cancel the VAT return policy and reduce enterprise costs,” he said. In addition, the industry is exploring overseas markets to address domestic oversupply. The association is also encouraging companies to adopt energy-saving technologies and improve efficiency. Finally, it urges all companies to follow self-discipline guidelines to avoid destructive price wars.

Polyurethane Rubber Roller

Polyurethane Rubber Roller,Polyurethane Arc Rubber Roller,Electroplating Pressure Roller,Polyurethane Rubber Casting Roller

Jiangyin Mingda Rubber Roller Co,Ltd , https://www.mingdaroller.com