The global potash fertilizer price continues to rise, and the market capitalization of the potash fertilizer sector in the capital market has hit a new high

　　Recently, two of the world's top fertilizer companies have predicted that the soaring prices of fertilizers, including potash, will continue. On November 1, Canadian Nutrien Ltd. (NTR.N), a global potash producer, raised its full-year achievements expectations, as it expects strong crop Prices to support fertilizer Prices. Driven by record demand and strong crop profits, potash Prices are continuing to rise in all major markets.

　　Another major global potash producer, Mosaic Company (MOS.N), also stated in a statement that it expects the upward trend in (fertilizer) Prices to continue. 90% of the company's sales in the fourth quarter of this year have already been presold, and some customers have further requested prepayment for the second quarter of 2022.

　　Since the second half of 2020, global potash Prices have been rising steadily to record highs, surpassing the potash Prices of the past decade and reaching the second highest point in history. This has also pushed up the stock Prices and market capitalization of potash stocks in the capital market.

　　Nutrien's stock Price has risen from $28.28 per share in July last year to $70 per share in October this year, reaching a high of $72.21 per share at one point. Its market capitalization has also increased from $17 billion (equivalent to 110.5 billion yuan) to $40.9 billion (equivalent to 265.9 billion yuan), a new high since its listing, with an increase of 140%. Two other potash producers, Mosaic Company (MOS.N) and Israel Chemicals Ltd. (ICL.N), have also shown the same upward trend, both exceeding historical highs.

　　Although the global energy crisis that erupted this autumn has significantly increased the cost of fertilizer production, this negative impact is mainly reflected in nitrogenous fertilizers and phosphate fertilizers. International giants such as BASF (BAS.DF), CF Industries (CF.N), and Yara (0O7D.L), the largest fertilizer producer in Europe, which mainly produce nitrogenous fertilizers, have announced production cuts or closures of ammonia plants used to produce nitrogenous fertilizers.

　　However, the soaring energy Prices has had a relatively small impact on potash producers. Potash is not as dependent on natural gas or coal as a raw material for production as nitrogenous fertilizers, which account for 70%-80% of its cost, nor is it as energy-intensive as phosphate fertilizers. Potash production costs are mainly based on material consumption, labor costs, and various depreciation and amortization. The proportion of natural gas, coal, and electricity energy costs in potash production costs is relatively small.

　　For example, the 2020 annual report of Uralkali (URKA.L) shows that its energy consumption accounts for 10.55%, while the 2020 annual report of Sichuan Potash (000893)(000893.SZ) shows that its fuel power accounts for an even lower percentage, only 8.41%. Therefore, the soaring energy Prices has little impact on its costs, which is an important reason why the capital market favors potash stocks among the three major fertilizer sectors.

　　In fact, potash, as one of the three major agricultural fertilizers, is in an unprecedented period of high prosperity. Global potash Prices are continuing to rise due to factors such as a clear supply-demand gap, a surge in ocean freight Prices, and inflation expectations.