The world’s inhabitants continues to develop, and so too does demand for agricultural crops. Not surprisingly, it is turning into more and more necessary for farmers to develop extra crops extra effectively.
That’s the place potash fertilizers are available in — they not solely improve meals high quality, but in addition enhance crop yield. Farmers use varied fertilizers to develop crops, however the two most typical are sulfate of potash (SOP) and muriate of potash (MOP).
Canada is the world’s prime potash nation by far, with annual output topping 16 million metric tons (MT) in 2022. China took the second spot when it comes to whole potash manufacturing at 6 million MT, adopted by Russia in third place at 5 million MT.
Buyers within the international potash fertilizer market ought to know the distinction between SOP and MOP. Learn on for a take a look at their widespread makes use of, in addition to manufacturing strategies and which firms are are mining these supplies.
Potash fertilizers: What’s muriate of potash?
MOP, or potassium chloride, is essentially the most generally employed potash fertilizer and can be utilized to farm a wide range of meals, notably chloride-loving greens akin to sugar beets, corn, celery and Swiss chard. It may be helpful for soil that’s low in chloride, serving to to construct resistance to illness in crops.
There are some drawbacks to this sort of potash fertilizer. For instance, if excessive ranges of chloride are current within the soil or if irrigation water is getting used to develop crops, including MOP can create a poisonous imbalance in plant vitamins. Which means ranges of the fertilizer must be rigorously managed, and MOP should solely be used for choose crops.
Nonetheless, MOP stays one of the vital industrial fertilizers within the potash household, with over 34.6 million MT consumed in 2021 in comparison with simply 1.8 million MT of SOP. The outlook for the potash fertilizer market as a complete stays constructive, though in 2023 MOP costs fell from the highs they skilled in March 2022 — these ranges finally grew to become cost-prohibitive for farmers. Whereas costs are anticipated to stay mushy in 2024, demand for potassium chloride is set to grow at a compound annual development price of 4.13 p.c between 2023 and 2030.
Nutrien (TSX:NTR,NYSE:NTR), an organization formed by the merger of Potash Company of Saskatchewan and Agrium, is a significant producer of MOP. Nevertheless, as a result of anticipated future demand for fertilizers that promote crop manufacturing and plant development, many smaller firms have begun exploring and growing their very own potash initiatives.
For instance, Highfield Sources (ASX:HFR) is an MOP explorer working to carry its Spain-based Muga potash undertaking into manufacturing. Muga is expected to produce greater than 1 million MT of MOP per yr, with EBITDA coming to round 410 million euros yearly as soon as it reaches full manufacturing. Muga is anticipated to enter construction in early 2024.
Saskatchewan-based Western Potash, a subsidiary of Western Sources (TSX:WRX), started scorching mining in mid-2020 as a part of Phase 1 mine construction at its Milestone MOP undertaking. Commissioning of the processing plant commenced in May 2023, with plant manufacturing slated to begin in December.
Gensource Potash (TSXV:GSP), which can be based mostly in Saskatchewan and centered on MOP, announced in early 2020 that agriculture chemical firm HELM can be the offtaker for the corporate’s Tugaske undertaking within the province. The undertaking is building prepared and financing is underway. Firms akin to Verde AgriTech (TSX:NPK,OTCQB:AMHPF), Sage Potash (TSXV:SAGE,OTCQB:SGPTF) and Karnalyte Sources (TSX:KRN) are all additionally concerned within the exploration, growth and manufacturing of MOP fertilizers.
Potash fertilizers: What’s sulfate of potash?
SOP is taken into account a premium-quality potash. It comprises two key vitamins for rising crops: potassium and sulfur. Utilizing SOP improves each high quality and crop yields and makes crops extra resilient to drought, frost, bugs and even illness. SOP can enhance the look and style of meals and enhance a plant’s means to soak up key vitamins like phosphorus and iron.
Most frequently, SOP is used on high-value crops like fruits, greens, nuts, tea, espresso and tobacco. It really works higher on crops which are delicate to chloride, which could be poisonous to some fruit and vegetable crops.
SOP isn’t a naturally occurring mineral, and often should be produced by chemical strategies. Due to the resource-intensive processes used to create it, SOP is priced greater than MOP. The commonest methodology used to supply the fertilizer SOP known as the Mannheim course of. It includes pouring potassium and different uncooked minerals right into a muffle furnace that’s heated above 600 levels Celsius, making a response between potassium chloride and sulfuric acid. Fertilizer produced like this accounts for roughly 50 to 60 p.c of worldwide SOP provide.
The second most typical method of constructing SOP, accounting for about 25 to 30 p.c of provide, is by reacting potassium chloride with varied sulfate salts to kind what known as a double salt.
“The commonest uncooked materials employed for this goal is sodium sulfate. Sodium sulfate, both within the type of mirabilite (also referred to as Glauber’s Salt) or sulfate brine, is handled with brine saturated with MOP to supply glaserite,” Kalium Lakes (ASX:KLL,OTC Pink:KLLKF), a Western Australia-focused SOP firm, explains on its website. “The glaserite is separated and handled with recent MOP brine, decomposing into potassium sulfate and sodium chloride.”
There are additionally operations that produce the sort of potash fertilizer through the use of salt mixtures from pure brines. This requires brine with excessive sulfate ranges which are usually present in salt lakes. Firms in a position to make use of naturally occurring brines embody Compass Minerals Worldwide (NYSE:CMP), which operates out of Overland Park in Kansas, and Chile’s SQM (NYSE:SQM), which has operations within the Salar de Atacama. SQM is a significant producer of lithium as properly.
There are additionally smaller potash fertilizer firms that finally plan to supply SOP, together with Agrimin (ASX:AMN) which says its Mackay project in Western Australia will probably be shovel prepared in 2024.
Ultimate ideas on SOP and MOP
Understanding the distinction between SOP and MOP is vital for traders who need to put cash into the fertilizer sector. Potential market individuals also needs to take into account the business’s total well being and outlook, and in relation to shares they might do properly to contemplate widespread components like jurisdiction, administration and funds.
FAQs for potash
Potash is a potassium-rich salt that’s fashioned in underground deposits from evaporated seabeds, the place it’s then mined. Potassium is taken into account a necessary component for all crops, animals and people.
The phrase “potash” is derived from an early manufacturing method the place potassium was leached from wooden ash and concentrated by evaporation utilizing giant iron pots.
What’s potash used for?
The overwhelming majority of potash is utilized in fertilizers to help in plant development. A small proportion is used within the manufacturing and manufacturing of detergents, ceramics, prescription drugs and water conditioners, and as a substitute for de-icing salt.
What’s potash fertilizer?
The 2 most in-demand kinds of potash fertilizer are MOP (potassium chloride) and SOP.
MOP is extra generally deployed to extend soil well being and assist in illness resistance for crops. Crops that use MOP embody sugar beets, corn, celery and Swiss chard.
SOP is taken into account a premium-quality fertilizer because it contains the addition of sulfur. This specialty fertilizer is used on high-value crops akin to fruits, greens, nuts, tea, espresso and tobacco. SOP improves each high quality and crop yields, making crops extra resilient to drought, frost, bugs and illness.
That is an up to date model of an article initially revealed by the Investing Information Community in 2015.
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Securities Disclosure: I, Melissa Pistilli, maintain no direct funding curiosity in any firm talked about on this article.
Editorial Disclosure: Sage Potash is a consumer of the Investing Information Community. This text isn’t paid-for content material.
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