The U.S. Geological Survey (USGS) released a new report showing that global potash markets are recovering from the economic downturn of 2010 as consumption is increasing and production is returning to pre-2008 levels.
The (USGS 2010 Minerals Yearbook on Potash, produced in July 2012, shows that although the majority of potash used in the United States continues to be imported, domestic production is increasing.
“Domestic production increased by 29 percent to 930,000 metric tons potassium oxide in 2010 from 720,000 in 2009. U.S. sales of potash increased by nearly 60 percent from that of 2009; and apparent consumption more than doubled to 5.6 million metric tons in 2010 from 2.5 million metric tons in 2009. World production of potash increased by 64 percent from that of 2009,” the report states.
Domestically, states leading the production list includes New Mexico, Michigan and Utah. Additional potash mines are planned in New Mexico. Globally, two major potash projects started in early 2012 including Intrepid Potash’s Carlsbad mine and K+S’s Legacy mine in Saskatchewan. Meanwhile, brownfield projects are ongoing for Potash Corp, Mosaic, Uralkali, SQM and Qinghai Salt Lake.
Momentum gained in 2010 in potash production and sales is expected to continue, according to the Arizonal Journal. The report notes, “World potash production and consumption are projected to continue to recover from the economic downturn that lasted into 2009. According to the International Fertilizer Industry Association, potash production was projected to increase in 2011 by seven percent from that of 2010 and by an additional three percent in 2012.” It also states, “Potash exploration and development is expected to remain very active during the next decade. …Increasing world population and its need for food will require continued increases in both potash production and consumption.”
Although potash production has remained relatively stable over the past few years in the United States, demand continues to outpace supply. Reported consumption was 5.9 million metric tons in 2007, 6.7 million in 2008, 2.6 million in 2009, 5.4 million in 2010, and an estimated 6.5 million in 2011.
Despite the fact that global potash demand growth was slower in the first quarter of 2012, the outlook for 2012 is still positive. Prices are anticipated to remain near fourth quarter 2011 levels.
To view the USGS report, click here.