Potassium Sulfates           

  *Thousands of short tons per year of potassium sulfate (1) and potassium-magnesium sulfate (2).

In March 2001, Basic Elements Manufacturing commissioned a new plant to produce potassium sulfate in Grantsville, Utah. The plant’s capacity is rated at 40,000 annual tons.

In November 2001, IMC Global to sold the company's salt and potassium sulfate businesses in Ogden, Utah, to a unit of Apollo Management, in order to pay down debt. The plant is now operated as Great Salt Lake Minerals, its former name before IMC Global acquired it in 1998 from Harris Chemical. Great Salt Lake Minerals is a subsidiary of the Compass Minerals Group.

In mid-1999, IMC Kalium consolidated its operations, IMC Kalium Carlsbad, and Western-Ag Minerals, Carlsbad, into a single operation with the construction of a new processing plant. In the process, the old Western-Ag plant was closed permanently. The former IMC Kalium now operates as IMC Potash.

Profile last published 4/15/02; this revision, 4/7/03.

DEMAND
2001: 879 thousand short tons; 2002: 896 thousand short tons; 2006: 960 thousand short tons, projected. Demand equals production plus imports (2001: 109 thousand short tons; 2002: 135 thousand short tons) less exports (2001: 601 thousand short tons; 2002: 630 thousand short tons).

GROWTH
Historical (1997 - 2002): 1.8 percent per year; future: 1.8 percent per year through 2004.

PRICE
Historical (1997 - 2002): High, $209 per ton, potassium sulfate, list, std., bulk, c.l., f.o.b. works; low, $190 per ton, same basis. Current: $190 to 200 per ton, same basis. Potassium-magnesium sulfate, $87 per ton, same basis.

USES
Specialty fertilizers (non-grain uses, e.g. tobacco, citrus fruits, grapes, potatoes), 91 percent; potassium supplement to animal feeds, 8 percent; industrial applications (accelerator in gypsum board, flash suppressant in explosives, pharmaceuticals), 1 percent.

STRENGTH
Potassium sulfate (SOP, sulfate of potash) is a source of highly soluble potassium, and has the additional benefit of supplying sulfur. It is used in agricultural production systems where potassium is a limiting nutrient and also as a substitute for potassium chloride on chloride-sensitive crops.

SOP competes as a specialty fertilizer with lower cost potassium chloride, known as muriate of potash (MOP), having the chemical formula of KCl. It is the favored fertilizer for non-grain crops that are sensitive to chloride ion, such as tobacco. Similarly, potassium-magnesium sulfate has a niche in supplying needed magnesium nutrient for Florida citrus crops 

Crop irrigation can contribute to the buildup of chloride in the soil that may adversely affect the crop yield for deep-rooted plants. Conditions that are most likely to benefit from potassium sulfates include the use of relatively hard irrigation water, irrigation of high-chloride soils and irrigation of chloride-sensitive crops. Besides tobacco, crops such as peaches, other stone fruits and some vegetables are believed by some sources to produce better-quality product with a nonchloride potassium source. Potassium sulfates’ use in California vineyards is increasing too.

WEAKNESS
Tobacco is very sensitive to the presence of chloride ions in the soil. Thus, tobacco fertilized with MOP may develop adverse burn characteristics in the finished product. Approximately 50 percent of potassium sulfate consumed in the US is used for tobacco. US production of tobacco, however, has declined by 5 percent per year on average, since 1995, from 1.3 billion to 0.9 billion pounds in 2002. Some of the decline in the last year was due to dry weather conditions and disease, so the actual production target or estimating fertilizer usage was more likely 1 billion pounds. This figure probably represents a stable demand metric for SOP in the foreseeable future.

Because of the higher price of potassium sulfate, compared to MOP, it will continue to be used only in those potassium fertilizer applications for higher valued crops which are sensitive to chloride ion.

OUTLOOK
Demand for potassium sulfates is dependent on the strength of the niche agricultural sector, which requires chloride-free potash. The challenge for distributors of potassium sulfate is to convince agriculturists that potassium sulfate is worth the extra cost - that as a fertilizer it produces heartier yields than the more prevalent MOP. MOP makes up about 85 percent of the world potash market, selling for between $110 to $125 per ton, while potassium sulfate sells for as much as $200 per ton. Growth through 2006 is projected at 1.8 percent per year.