As the supply and demand situation remained unchanged, international oil prices continued to rise that week, continuing the trend of the first quarter’s sharp rise.

On the demand side, U.S. employment data eased concerns about weak global demand for crude oil.

London Brent crude oil futures for June delivery rose for the second consecutive week, while light crude oil futures for May delivery on the New York Mercantile Exchange rose for the fifth consecutive week.

The media revealed that the United States is considering more sanctions against Iran, which have cut Iran’s crude oil exports to the bottom. In addition, an important Venezuelan crude oil port was again suspended due to U.S. sanctions.

Nobel Rucker, head of economics at Ulius Bell Bank, said supply prospects remained the primary consideration in the oil market. Saudi Arabia’s sustained production restrictions set a bullish tone, supporting crude oil prices, so that Brent crude oil futures prices are expected to reach $70 a barrel.

In addition, the U.S. Department of Labor reported that employment growth rebounded rapidly from a 17-month low in March.

“Market analysts say these figures will be enough to keep prices above $60 for at least a few weeks.

In the first quarter of the past decade, the international oil price has renewed its biggest single-quarter rise in nearly 10 years. The data show that among the benchmark oil prices in New York and London, oil prices in New York rose for three consecutive months, leading to a cumulative increase of more than 31% in the first quarter, refreshing the biggest single-quarter increase since the second quarter of 2009, while Brent oil prices in the North Sea rose 25% in the same period, also the biggest single-quarter increase in nearly 10 years.

Propylene industry has experienced the peak of capacity expansion from 2014 to 2016 and a short period of backwardness in 2017. In 2019, new production capacity of propylene has reached an all-time high in recent years, and is expected to increase by 5.86 million tons per year. However, propylene demand growth is slower than capacity growth, self-sufficiency rate will rise again, domestic propylene capacity to catch up with equivalent consumption, or face the situation of excess capacity.

Propylene production capacity in China has expanded rapidly in recent years. Propylene production has increased in all routes. Propylene dehydrogenation (PDH) and coal-based olefins (CTO) have increased significantly by virtue of cost advantages. In addition to the new production capacity of PDH route, the coal-to-olefin (CTO) route has also warmed up, and its new production capacity in 2019 is at a high level over the years. Due to the rising international crude oil prices and other factors, China’s CTO has developed vigorously, especially the rich coal resources in the western region. Now it has formed four CTO industrial bases, namely, Ordos in Inner Mongolia, Yulin in Shaanxi, Ningdong in Ningxia and Zhundong in Xinjiang. By the end of 2018, CTO units had a capacity of about 4.8 million tons per year. In 2019, with the commissioning of Jiutai Energy, Zhongan Coal Chemical Industry and Ningxia Baofeng three projects, propylene production capacity increased by 900,000 tons per year.

At the same time, the new propylene production capacity of new refineries can not be ignored. Under the stimulation of a series of reform dividends such as the liberalization of crude oil import and the decentralization of examination and approval authority, new refineries have opened up the capital channel by obtaining capital operation such as bond financing and equity financing through banks. In 2019, China welcomed large-scale integrated refining and chemical projects such as Zhejiang Petrochemical Corporation and Baolai Group, which are expected to release 1.9 million tons of propylene per year.

It should be noted that although the propylene equivalent consumption increased steadily in 2019, the growth rate continued to slow down. Polypropylene, propylene oxide and acrylonitrile were the three downstream products with fast growth, and their structure proportion increased slightly; the propylene and acrylic acid proportion was the same as in 2017; butanol and octanol proportion decreased slightly.

According to the disclosure, in 2018, China’s propylene production capacity was 34.83 million tons per year, reaching 31.4 million tons, an increase of 5.5% and 9.2% respectively over 2017, and its equivalent consumption was 40.1 million tons, an increase of 7% over the previous year. Propylene production is expected to reach 41.73 million tons per year in 2019, with output of 34 million tons, up 19% and 8.3% respectively from the previous year, while equivalent consumption of 42.1 million tons will continue to slow down to 5%. Data show that China’s propylene supply may face a pattern of overcapacity.

On the first day of April, the price of Multi-Fertilizer increased by 30-50 yuan/ton, especially in Jiangsu, Northeast and Henan.

The biggest support for this round is urea. As we all know, urea has entered the upstream channel since the end of February. Up to now, it has risen by more than 200 yuan/ton in many places. Small particles in Shandong and Henan have been on the front line of 2000 yuan/ton as early as possible, which is also the highest price of urea since November 2018. The adjustment lasted for a long time and increased a lot, which exceeded market expectations. Especially for compound fertilizer enterprises, urea purchasing mostly adopts on-demand purchasing mode. Generally, the purchasing frequency is 7-10 days, and the large-dose stockpiling is only a few, which leads to the enterprises with less pre-stockpiling, and the new cost will increase more. Taking conventional urea 40% cl28-6-6 as an example, the cost of nitrogen fertilizer is 140 yuan/ton higher than that at the beginning of March. Although ammonium phosphate and potassium fertilizers have been declining in recent years, their declines have a narrowing trend, which makes it difficult to hedge the cost caused by urea rise. Statistics show that the cost of raw materials for urea 40% cl28-6-6 has increased 125 yuan/ton as of April 1 compared with the beginning of March.

Prices of enterprises are rising along with the trend, which promotes the rise of market prices. At the end of the month and at the beginning of the month, the adjustment of enterprises is relatively obvious. Part of the adjustment is to give preferential policies in the earlier period, with the impact range of 20-50 yuan/ton. Part of the adjustment is to increase the price directly, with the range of 30-50 yuan/ton, and some high nitrogen fertilizers are about 60 yuan/ton. With the reduction of preferential policies or the increase of prices, it will help to reduce the supply of low-end goods in the market, and the focus of new orders will move upwards. However, at present, it should be noted that before the adjustment of enterprises, the amount of advance receipts is large (especially at the end of the month these days, some distributors pay money actively for fear of rising prices). That is to say, at present, there are many orders in advance, especially spring tillage fertilizer. The increase of spring tillage fertilizer lies more in purchasing goods and boosting the market atmosphere. As for summer fertilizer, from the perspective of pre-harvest, the estimated impact is 30-40%.

From the downstream demand point of view, boosted by higher soybean subsidies, maize planting area will continue to be reduced in some parts of Northeast China, while summer maize planting area in Mainland China will be relatively better than other agricultural products, and the planting area may be relatively stable. However, with the increase of agricultural prices, the level or reduction of fertilizer application may be reduced in some areas. This is also the biggest restriction on the compound fertilizer market.

At present, the compound fertilizer market is still in a good mood. Among them, 45% CL3 * 15 of Jiangsu is more than 2000 yuan/ton, 40% cl30-5-5 of Henan Gaota is more than 2030 yuan/ton, and some new orders in Northeast China are delivered to 45% s12-18-15 at about 2480 yuan/ton. Although most of the prices are tentative increases and new orders follow up is not much, but supported by costs, enterprises intend to bid strongly. It is expected that before the Qingming Dynasty, some enterprises will adjust, and the supply of low-end goods in the market will continue to decrease, especially for high-nitrogen products. The turnover focus is expected to shift upward.

Recently, crude oil futures in both internal and external markets continue to rise in tandem. Domestic crude oil futures, NYMEX crude oil futures and Brent crude oil main contracts have reached new highs since November 2018. Analysts said that macro-level and basic-oriented support short-term crude oil prices to maintain a strong trend. In the second quarter, although the game between Saudi Arabia, Russia and the United States on oil market will intensify, OPEC + production reduction action is not expected to change significantly. The supply and demand pattern of the crude oil market will continue to improve, which is expected to support the further upward movement of the oil price center.

Internal and external discs have reached a new high

On April 3, the main 1905 contract of domestic crude oil futures reached a maximum of 475.5 yuan/barrel, a new high since late November 2018, closing at 472.4 yuan/barrel, up 1.26%. As of that day, the main contract of NYMEX crude oil futures reached a maximum of 62.99 dollars/barrel, a new high since November 8, 2018; the main contract of Brent crude oil reached a maximum of 69.96 dollars/barrel at one time, which was the highest since November 13, 2008. New high.

On the one hand, the ISM manufacturing index of the United States was higher than expected in March, while the PMI of China’s Caixin manufacturing industry hit an eight-month high in March, according to Li Yanjie, an analyst at CITIC Construction Investment Futures. The expansion of China’s and the United States’manufacturing industry has cooled global crude oil demand worries. On the other hand, the Reuters survey shows that OPEC’s implementation rate of output reduction is expected to be 135% this year and 101% in February, and OPEC’s oil production is expected to decrease by 280,000 barrels per day to 30.4 million barrels per day in March, the lowest level since 2015. In addition, the Jose oil terminal in Venezuela was suspended due to insufficient electricity supply. Macroscopic and basic orientation support short-term crude oil prices to maintain a strong trend.

Zang Gali and Xu Lin, energy and chemical researchers at Sinda Futures, said that despite differences between Saudi Arabia and Russia in reducing production, US President Trump again used Twitter to pressure OPEC, but it is not expected that significant changes will occur before the Vienna Conference in late June.

De-stocking of crude oil will accelerate

Looking ahead to the fundamentals of the oil market in the second quarter, Zang Jiali and Xu Lin believe that because Saudi Arabia has exceeded the cut-off quota and has limited space for further reduction, the action of reducing oil production in the second quarter will continue to advance steadily, but the boost to oil prices will be weakened. In addition, as a leading indicator of crude oil production, the number of active oil drilling rigs in the United States has fallen to the lowest level in a year, and the growth rate of crude oil production in the United States will continue to slow down in the second quarter, and even there may be a slight negative growth.

Regarding the geo-situation, the above-mentioned analysts said that Venezuela’s domestic situation is still unclear and the geo-situation risks remain. Venezuela’s crude oil production in the second quarter may continue to decline after a brief recovery, subject to U.S. sanctions. On the Iranian side, the strategic goal of reducing Iranian oil exports to zero is not in the immediate interests of the United States. The Iranian sanctions issue will probably make a smooth transition, that is, to extend the exemption period while maintaining or slightly reducing the existing exemption.

Overall, the oil market game between Saudi Arabia, Russia and the United States will intensify in the second quarter, but OPEC + production cuts are not expected to change significantly. The focus of the crude oil market is still on the supply side. The consumption of refined oil, especially gasoline, is better than expected, and the de-stocking process of global crude oil is expected to accelerate. The supply and demand pattern of the crude oil market in the second quarter is expected to continue to improve, which will further support the upward movement of the oil price center. The target price of NYMEX crude oil will be raised to $67 per barrel, Brent crude oil to $75 per barrel and domestic crude oil to $500 per barrel.

Active production cuts by oil producing countries, passive production cuts by Iran and Venezuela, slowdown of upstream investment in shale oil in the United States and increase of seasonal demand have pushed oil prices upward continuously. However, with the tightening of supply in the first quarter and the gradual realization of hedging and release of pipeline capacity, the upward resistance of oil prices will increase in the latter part of the second quarter.

OPEC output continued to decline

In February, OPEC crude oil production fell to 30.549 million barrels per day, a new low in the past four years. The implementation of production reduction in major oil producing countries has led to a significant decline in OPEC crude oil production. From the implementation of production reduction in oil-producing countries, the implementation rate of production reduction in January and February this year reached 86% and 106%, respectively. Saudi Arabia and Kuwait, the major oil-producing countries, maintained a high implementation rate of production reduction. Under the framework of active output reduction, Venezuela and Iran’s output also declined passively due to the sanctions imposed by the United States. Venezuela’s crude oil production has fallen by more than 1 million barrels per day in the past two years, falling to 500,000 barrels per day in March due to the paralysis of its domestic power system, and its crude oil exports to the United States dropped to 0 in mid-March. In addition, Iran’s output and exports have continued to decline since the United States resumed sanctions against Iran in November last year. Iran’s crude oil production fell to 2743,000 barrels per day in February this year, the lowest level in the past five years. Since November last year, Iran’s exports to Europe, South Korea and other places have all dropped to 0. At present, only a few countries such as China and India are exporting, and the export volume is also gradually declining.

Upstream investment in shale oil in the United States slowed down

Recently, the growth of crude oil production in the United States has slowed down. The number of active drilling rigs in the United States has declined in the past year or so. Especially since the end of last year, the total number of active drilling rigs in the United States has declined due to the drop in oil prices. It dropped to 824 in the week of March 22, down 64 from the high at the end of last year. According to the time when the oil price of drilling rigs lags for about 4 months, the data of drilling rigs will continue to weaken in the next 1-2 months. 。 Meanwhile, in the data of seven major shale oil producing areas in the United States, the number of drilling wells has fallen in recent months, which is directly related to the decline in the number of drilling rigs. Permian Basin, the largest shale oil producing area in the United States, has been declining in single well production for nearly a year, which means that the efficiency of shale oil wells in the region is declining, and with the decline of the growth rate of production in the region, more drilling investment may be needed to maintain production in the future. At the same time, higher requirements are put forward for the cost of shale oil production, and shale oil enterprises may have to lead to the future. Efforts should be made to reduce mining costs.

US demand will increase seasonally

Since mid-February, refinery activity in the United States has been gradually active, refinery start-up rate and crude oil processing volume have been rising, and the import of refineries in the United States has increased seasonally, which will lead to the de-stocking of crude oil. In the past month, U.S. crude oil stocks have fallen by about 15 million barrels a day, and the speed of de-stocking has accelerated. Inventory reports for the week of March 22 were affected by a chemical tank fire in the Houston Channel of the United States. Refinery start-up declined by 2.3% and crude oil stocks increased by 2.8 million barrels. However, we believe that this is only a short-term disturbance and that refinery activity in the United States will continue to rise in the second quarter.

U.S. crude oil capacity is expected to be released in the second half of the year

In 2018, inadequate pipeline capacity in North America led to the accumulation of regional stockpiles of crude oil, and led to a sharp rise in WTI-Midland and WTI-WCS price spreads, but since then, with the increase of pipeline capacity, the current price spreads have returned to a reasonable level. However, this does not mean that crude oil pipeline capacity can meet the demand. According to OPEC statistics, the Permian crude oil production in the main shale oil producing areas of the United States has exceeded 3.7 million barrels per day, and exceeded the pipeline capacity of the area, which to some extent limits the growth of production in the region. According to the new pipeline plan of the United States, the new pipeline plan of the United States from 2019 to 2020 is expected to be 5.960 million barrels per day, and the new pipeline capacity from Permian to the Bay Area in 2019 will reach 1.925 million barrels per day, most of which will be put into operation in the second half of this year, which means that the inventory pressure of the Permian Basin will be eased in the second half of this year.

Brand Finance, an international brand value authority, released its top 50 list of global oil and gas companies in 2019, including three Chinese companies. Compared with last year, PetroChina and Sinopec still rank second and third, but both brand value and brand rating have increased considerably.

BrandFinance, based in London, ranks companies in different industries globally in terms of brand value every year. The brand value judgment indicators in the field of petroleum and natural gas mainly include the following aspects: brand strength, brand usage fee, brand usage Commission rate, brand annual revenue and estimated revenue.

According to these indicators, this year’s top ranking is still Dutch Shell Oil Company, whose brand value is as high as $42.3 billion, an increase of 7% over the previous year; the fourth to tenth rankings are French Daudal Oil Company, British BP, American Chevron, Malaysian Oil Company, American Exxon Mobil, Italian Eni and Norwegian National Oil Company. PetroChina and Sinopec’s brand value increased by 18% and 23.3% respectively compared with 2018, and their ratings changed from AA + and AA to AAA-, respectively.

This year’s ranking data show that American oil companies account for 23.6% of global brand value, followed by China (17.2%), the Netherlands (10.8%), France (6.6%), Russia (5.4%) and the United Kingdom (5.0%). In addition, this year’s ranking has several characteristics: first, the brand value of national oil companies is growing faster than that of international oil companies; second, oil and natural gas brands are generally respected by users and the market in this industry; third, new faces appear in the ranking, that is, Abu Dhabi National Oil Company, which was unknown in the past ranking, is ranked 12th.

Omar Zaafreni, senior vice president of Abu Dhabi National Petroleum Corporation, believes that technological progress is extremely important for the development of the oil and gas industry. “Our ambitious goal is not only to make the company a modern national oil company, but also to become a modern energy company when the fourth industrial revolution comes.”

BrandFinance CEO David Hague said: “With the application of new digital technologies such as artificial intelligence and cloud technology in the field of oil drilling, oil and gas giants need to be prepared to make digitalization a top priority in reducing costs and improving efficiency. Only those enterprises that can explore and use these latest technology tools can maintain a leading position and enhance their brand value in the future.

Last week (March 25, 2019 – March 29, 2019), the market demand was insufficient and the price of potassium chloride continued to fall. On April 1, China’s Wholesale Potassium Chloride Price Index (CKPI) was 2231.82 points, down 1.91 points, or 0.09%. It rose 134.69 points, or 6.42%. It fell 1058.78 points, or 32.18%, compared with the base period.

Supply Situation: In terms of domestic potassium, Qinghai Salt Lake plant operates normally with a daily output of about 14,000 tons; the arrival price of 60% crystal powder of the base product maintains 2,350 yuan/ton, and the rebate policy is 30-50 yuan/ton; the start-up of small factories in Qinghai has not been fully restored, and the regional transaction price is about 2,300-2,350 yuan/ton. As for imported potassium, the arrival of potassium in the port continued to increase, with the stock of more than 2.1 million tons. Influenced by the increase of inventory pressure, some traders reduced their prices to about 2 350-2 380 yuan/ton with 62% Russian-white potassium quotation. As for potassium frontier trade, a small amount of new supply is replenished, the stock is general, and the sale is mainly in the Northeast market. The price of 62% Russian-white potassium is maintained at about 2150 yuan/ton.

Demand situation: The main fertilizer for agricultural spring tillage is nitrogen fertilizer, but the demand for potassium fertilizer is insufficient. The shipment of compound fertilizer enterprises improved, and the start-up rate of some enterprises increased. The overall start-up rate of compound fertilizer enterprises increased by 0.96 percentage points to 45.13 percent from the previous week, an increase of 5.13 percentage points over the same period last year.

International market: International potassium chloride prices fell slightly last week. In recent years, the demand of international potash fertilizer market has been slightly weak. In Brazil, the price of potassium chloride has fallen; in Europe, the market demand is still good. In terms of price, the offshore prices of potassium chloride in Canada, the Russian Federation, Jordan and Israel fell by $5-8 per ton at the high end, which were $257-298 per ton, $243-310 per ton, $267-287 per ton and $267-311 per ton respectively; the offshore prices of potassium chloride in Brazil fell by $5 per ton at the low end and $5 per ton at the high end, which were $340-350 per ton; and the offshore prices of potassium chloride in Southeast Asia remained stable at $295-315. Tons per ton.

Table 5: International Potassium Chloride Price Change Table

产品 区域 涨跌幅度

Products: Regional Range of Rise and Decline

（美元/吨） 现货价格（美元/吨）

Spot price (US dollar/ton)

2019-3-28 2019-3-21

2019-3-28 2019-3-21

氯化钾

potassium chloride

(FOB散装) 加拿大 0-↓5 257-298 257-303

(FOB Bulk) Canada 0-5 257-298 257-303

俄联邦 0-↓5 243-310 243-315

Russian Federation 0-5 243-310 243-315

约旦 0-↓8 267-287 267-295

Jordan 0-8 267-287 267-295

以色列 0-↓5 267-311 267-316

Israel 0-5 267-311 267-316

CFR东南亚 0-0 295-315 295-315

CFR Southeast Asia 0-0 295-315 295-315

CFR巴西 ↓5-↓5 340-350 345-355

CFR Brazil_5-5 340-350 345-355

Source of data: collated according to relevant materials

Domestic market: The price of potassium chloride in domestic market has dropped slightly recently. According to the monitoring data of the association, the wholesale prices of the domestic potassium chloride provinces in Hunan and Hubei fell 50 yuan/ton and 43.3 yuan/ton respectively compared with the previous week, while the prices of other provinces remained stable; the wholesale prices of imported potassium chloride provinces in Yunnan, Hubei and Fujian fell 170 yuan/ton, 125.6 yuan/ton and 50 yuan/ton respectively compared with the previous week, while the prices of other provinces remained stable.

表6：国内氯化钾价格变动表

Table 6: Price Change Table of Potassium Chloride in China

品种 省份 2019-3-28

Varieties Provinces 2019-3-28

(元/吨) 2019-3-21

(yuan/ton) 2019-3-21

(元/吨) 涨跌幅

(Yuan/ton) Increase or decrease

(元/吨) 环比

(yuan/ton) ring ratio

Domestic potassium chloride

批发价 湖北 2,340.0 2,383.3 -43.3 -1.8%

Wholesale Price Hubei 2,340.0 2,383.3-43.3-1.8%

湖南 2,270.0 2,320.0 -50 -2.2%

Hunan 2,270.0 2,320.0-50-2.2%

Import potassium chloride

批发价 福建 2,775.0 2,825.0 -50 -1.8%

Wholesale Price Fujian 2,775.0 2,825.0-50-1.8%

湖北 2,660.0 2,785.6 -125.6 -4.5%

Hubei 2,660.0 2,785.6-125.6-4.5%

云南 2,280.0 2,450.0 -170 -6.9%

Yunnan 2,280.0 2,450.0-170-6.9%

Data Source: China Agricultural Circulation Association

At present, the market is abundant in potassium fertilizer supply, traders are forced by inventory pressure, the price of shipment is loose, and the price of potassium chloride has dropped slightly. In the future, in the domestic market, compound fertilizer enterprises will enter the summer fertilizer production period to support the demand for potassium fertilizer; in the international market, the purchase of new international potassium fertilizer orders or delayed until mid-April, it is difficult to improve at present. In summary, it is expected that the domestic price of potassium chloride will stabilize and consolidate in the short term, focusing on the salt lake price policy and the start-up rate of compound fertilizer enterprises.

Crude Oil Market: Brent closed at $69.18 a barrel last night (3 a.m. Beijing time, April 2), up $1.19 from the previous deal.

Price dynamics: on April 2, Qilu Petrochemical quoted 4200 yuan/ton, down 400 yuan/ton from the previous trading day; Yangzi Petrochemical quoted 4250 yuan/ton, down 400 yuan/ton from the previous trading day; Hainan Refining and Chemical quoted 4250 yuan/ton, down 400 yuan/ton from the previous trading day; Wuhan Ethylene quoted 4250 yuan/ton, down 400 yuan/ton from the previous trading day; Huaxing Petrochemical quoted 4150 yuan/ton, down from the previous trading day. The daily quotation of Zhenghe Petrochemical Company was reduced by 200 yuan/ton, and the quotation of Zhenghe Petrochemical Company was 4150 yuan/ton, which was 200 yuan/ton lower than the previous trading day.

Analytical Comments: Petroleum benzene market inventory continues to be high, downstream demand is weak. The listing price of Sinopec’s enterprises was lowered by 400 yuan/ton, and that of Sinopec’s enterprises by 200 yuan/ton.

U.S. WTI May crude oil futures electronic disk closed Monday (April 1) up $1.63, or 2.71%, to $61.77 a barrel. Oil prices rose more than 2% on Monday to a year-high of $69 a barrel, after positive signs from the global economy and tightening crude oil supply helped U.S. oil and oil to record their best first quarter performance in nearly a decade.

Meanwhile, ICE Brent crude oil futures closed up $1.64, or 2.43%, at $69.22 a barrel in May.

Sino-US economic data are improving to alleviate market worries about economic prospects

John Kilduff, a partner of Again Capital Management, a hedge fund, said the combination of good manufacturing purchasing managers’indices (PMI) in the United States and China, the world’s two largest economies, boosted oil prices. A series of weak economic data brought about by the greater resistance to ease today, so the bullish theme has not been suppressed.

Stock markets in the United States rose after strong manufacturing data from the United States and China eased fears of a slowdown in global economic growth.

In March, China’s manufacturing activity unexpectedly grew for the first time in four months. U.S. manufacturing data in March were also better than expected, leaving investors unhappy with the weak February retail sales data.

Jim Ritterbusch, president of Ritterbusch and Associates, said the bull market in the energy market had entered its fourth month and seemed able to continue.

OPEC production cuts and Venezuelan export declines support oil prices

The survey showed that OPEC’s oil supply fell to a four-year low in March as Saudi Arabia, the largest exporter, overfulfilled its output reduction agreement, while Venezuela’s oil production declined further due to sanctions and power outages.

A monthly survey released on Friday showed that analysts were cautiously optimistic about the oil market, raising their forecast for the average price of oil in 2019 to $67.12 for the first time in five months.

The Commodity Futures Trading Commission (CFTC) said on Friday that hedge funds and fund managers’bullish bets on U.S. crude oil rose to their highest level in more than five months.

Intercontinental Exchange (ICE) data show that in the week ending March 26, Brent crude oil speculators’net long positions increased by 13,429 to 322,035, the highest level since the end of October last year.

Baker Hughes, an energy services company, said U.S. energy companies last week lowered the number of oil rigs to the lowest level in nearly a year, with the largest decline in the first quarter of this year for three years.

Sometimes I just wonder: if there is no urea in this spring market, will it sink? Okay, thank you for urea! With the rising of nitrogen fertilizer, the market of phosphorus and compound fertilizer has been sounding good, so there are half-truths and half-falsehoods in the industry jokingly said: “It is all rising, there is no reason for potash fertilizer itself to continue to fall?” Well, although today is April Fool’s Day, but the author seriously said: April potassium chloride is indeed a little hopeful! The reasons are as follows.

From historical experience, the price of potassium chloride is expected to rebound ahead of time. In January-April 2017, the price of potassium chloride fell. The mainstream price of 62% white potassium in the port dropped from 2100 yuan (ton price, the same below) to 1950 yuan, a drop of 150 yuan. There was a slight rebound in May and June, and the basic stability was between 1950 and 2000 yuan. At that time, the apparent cost was about 1900 yuan, and the importer was slightly profitable. _January 2018 potassium chloride rally came to an end, February to April turned back to fall, 62% of the mainstream port white potassium price from 2250 yuan to 2150 yuan, a decline of 100 yuan. In May and June, there was a significant rebound, rising to 2300 yuan. At that time, the apparent cost was about 1,800 yuan, and the importer was profitable. In the first quarter of 2019, the price of potassium chloride has been falling. The mainstream price of 62% white potassium in the port has dropped from 2550-2600 yuan to 2350 yuan, a drop of more than 200 yuan. Now the apparent cost is about 2300-2350 yuan, and the importer has reached the edge of loss. From the above comparison, we can see that there is no inevitable causal relationship between price fluctuation and price itself, and the thickness of seller’s profit. But this spring, potassium chloride market is poor, importers are under great pressure, so it is natural that we will try our best to stabilize the decline and find opportunities for a rebound.

_In April 2017, the price of potassium chloride has been slowly declining for a whole month, and temporarily stabilized until the end of the month. The monthly decline of port standard potassium and domestic potassium is about 50 yuan, that of border trade potassium is 50-100 yuan, and that of port Dahong granule is the biggest, reaching 150 yuan. By May, due to a slight increase in demand, urea and monoammonium, especially the return of potassium frontier trade from the low end in late April, and the low pressure of its own port storage, the overall price of potassium chloride gradually rebounded. In April 2018, the domestic potassium chloride dropped 50-100 yuan, the port potassium chloride dropped nearly 50 yuan, the port potassium granule dropped 50 yuan at the low end but increased 50 yuan at the high end, and the advance price of potassium chloride in border trade rose 50 yuan because there was no goods. Since May, the rise of white potassium in the port has gradually led the overall price of potash fertilizer into an upward channel. At that time, there were many supports, such as the extension of large contract negotiations, the state storage inspection, the port logistics tension, and so on. So what do we have in April this year, in contrast to the market factors during the bottoming rebound of the previous two years? Frontier trade quotation rebounded by more than 50 yuan, the price of large granular potassium in Northeast Port began to be pulled up, logistics in some areas began to be tense, big contracts had not yet been negotiated, and urea continued to rise, compound fertilizer rebounded, and phosphate fertilizer gradually stabilized, especially there was not much room for further reduction in cost. So from historical experience, the market situation in April this year has been similar to that of May rebound in the previous two years. This year’s price has fallen earlier than the previous two years, and there is not a lot of inventory in the early downstream, so it is possible to rebound earlier in April this year.

From the perspective of supply and demand situation, we can not rule out the possibility of short-term rebound fluctuations. Since the current customs data are only updated to February, we should first look at the market supply and demand situation in January-February. The import volume of potassium chloride in January-February 2017 was 2.2 million tons, the port stock in early January and the end of February 2017 was 2.3 million tons, and the apparent consumption was about 1.7 million tons; the import volume of potassium chloride in January-February 2018 was 1.92 million tons, the port stock in early January and the end of February 2018 was 2 million tons and 2 million tons, respectively, and the apparent consumption was about 1.9 million tons; the import volume of potassium chloride in November-February 2019 was 2.3 million tons, and the beginning of January and the end of February 2019 At that time, the port stock was 1.8 million tons and 2.7 million tons respectively, and the apparent consumption was about 1.2 million tons. At the same time, the output of domestic potassium Market and stock changes are similar, so far this year’s performance is also an increase in leftovers. That is to say, the decline in market demand this spring is still obvious. But optimists believe that the amount of reduction in the earlier period may be released together in the later period, so a relatively large amount of explosion in a relatively small time, it is possible to form a hot scene. There are some reasons for this statement, but at present, the import volume in March is not small, and the total import volume in the first quarter of this year may also create a new historical record (although the import volume of border trade has decreased), but the demand reduction is inevitable, so under the increase and decrease, even if the late demand is really released later, it should be very difficult to play a big role. Influence. Generally speaking, the long-term trend of potassium chloride is not optimistic in terms of supply and demand situation, but the possibility of a short-term rebound in April can not be ruled out.

Looking from the market environment, there are long-term pressures but short-term support value-added tax Take the current port price of 62% white potassium 2350 yuan as an example. A 1% reduction in VAT affects the cost of 20 yuan. If the price of importers remains unchanged, their profits will increase by about 4 yuan, but if the price of importers is reduced by 20 yuan, their profits may decrease by 14 yuan. Regardless of the financial factors, simply looking at the 4, 14 or 20 yuan is not a big deal. It is not enough for the market to adjust once. Therefore, the reduction of VAT does not mean that the price of potassium chloride must be reduced. _The price of potassium chloride in the international market has been stable for nearly half a year, but there are some signs of loosening recently, which may be the key factor affecting the long-term trend. But after all, the price has fallen to the apparent cost line, so it will not affect too much for a while and a half. After all, the big contract has not been discussed, and the international situation in the future is likely to change again. _Recently urea has risen sharply, compound fertilizer is rising, and phosphorus fertilizer is stabilizing and trying to rebound. Will potassium chloride fall alone? Although there is no necessary relationship between them, it will undoubtedly reduce the pressure of potash fertilizer to continue to fall in price. In a word, the downward pressure of the price of potassium chloride has not really been relieved from the market environment (the following will be discussed in detail with the fourth point), but it is still possible to get a proper relief in the short term.

From the cost trend, it is not optimistic, so it is not recommended to increase the hoarding price. At present, the apparent cost of 62% white potassium in the port is about 2300-2350 yuan, which is basically the same as the price. The average CIF price of Brazilian Granules in the international market is US$350, and the standard CIF price in Southeast Asia is US$305. From the historical comparison between China and the two major spot markets, the price of US$290 in China may actually be stable. Although it is at least three months before the signing of the big contract in July-September, the international market is likely to change again, considering the situation of supply and demand, economic environment, climate factors and the trend of agricultural products, at least for the moment, the expectation of the international price trend is not ideal, unless there are strikes, railway collapses and water seepage in mining pits in the future. The emergence of a class of sudden and influential events. Therefore, if we talk about the negotiation of big contracts in 2019, the order of the three possibilities should be smaller decline than stability than rise.

_To sum up four points, the author believes that the space and pressure for the price of potassium chloride to fall still exist, but this is a prediction of the long-term trend, or just a worry, so it is not recommended to stock up potassium chloride for the time being. Sellers should “close as they see fit” and should not over-speculate. However, the rebound of potassium chloride in April is likely to occur, especially in the Northeast where logistics is tight and demand is concentrated. Perhaps the rebound will not be underestimated, so the downstream needs to consider whether the demand in April should be properly stored in advance as soon as possible.