Potassium Hydroxide Gets a Boost From Ag

January 12, 2022

Potassium Hydroxide is derived from Potassium Chloride, one of the most widely applied fertilizers in the U.S. Agriculture industry.

Originally born in the 1600’s with the Native Americans and the (starving) Pilgrims in Jamestown, the Agriculture industry has always been critical to keep America running. However, it wasn’t until the 1900’s, when the fundamentals of plant nutrition began to be better understood, that the use of chemical fertilizers became common. Today, the Potassium fertilizer market is projected to reach USD $26.87 billion by the end of this year.

Potassium is a critical nutrient for plants. Potassium Chloride, known as KCL, and Potassium Hydroxide, known as KOH, are both added directly to the soil and are used in the production of many types of chemical fertilizers. 2021 was a good year for supplementing potassium in soil. Consequently, both Potassium products have been in heavy demand throughout the past year for use in agriculture fertilizer chemicals. This healthy demand has resulted in rising prices. In addition to strong demand, Potassium Chloride has also experienced supply issues, such as the closure of a Potassium Chloride salt mine by one producer much earlier than expected. The issues have led Potassium Chloride to more than triple in cost over the past year.

There have been other factors also contributing to the price increases seen in the Potassium Hydroxide market. Notably, there has been a lack in imported product. This has slowly been easing as the supply chain problems have eased. The US relies on imports of Potassium Hydroxide, as there is currently only one domestic producer for dry KOH. Also, two out of four domestic liquid KOH producers have experienced plant issues; one due to plant upgrades, the other due to Hurricane Ida. The Force Majeure that was declared due to Hurricane Ida has since been lifted. Natural gas and energy costs, as well as rail and freight costs, have also increased.

Recently, all domestic producers of Potassium Hydroxide have announced increases. For more information in the Potassium Hydroxide market, reach out to a sales representative.

Hurricane Ida Another Setback for Supply Chains, But…

September 16, 2021

…On a positive note, Ida was less devastating than the winter storms Uri & Viola last February.

(When supply chains have as many problems as they’ve had this year, yeah, we’re looking for the bright side!!)

It’s been a rough year for supply chains. Most recently, Hurricane Ida, a dangerous and major hurricane, made landfall in Louisiana on August 29. Ida caused widespread power outages, flooding and damage, including to many chemical production facilities. Not surprisingly, this has exacerbated the issues chemical supply chains were already facing. In addition to these primary issues, chemical plants have also been dealing with issues such as problems getting a consistent and reliable supply of feedstock materials since the storm. Although many plants experienced outages lasting weeks, the overall effect of the storm was less devastating than that of the winter storms Uri & Viola earlier this year.

Here we take a look at the effect Hurricane Ida had on some of the chemicals that were affected by the storm:

Chlor-Alkali (Sodium Hydroxide/Sodium Hypochlorite): Ida had significant impact to the chlor-alkali market, and numerous producers have declared Force Majeure following the storm. These producers had plants in the direct path of the storm, and shut down prior to the storm. Now the idled plants are waiting for raw materials and repairs. This has caused noticeable tightness in the Sodium Hydroxide market.

Isopropyl Alcohol (IPA): While we have seen some softening in the Isopropyl Alcohol market in recent months, Ida shut down 35% of capacity and appears to have halted the sliding trend.

Glycol Ethers: Glycol Ethers have been affected, as 23% of capacity went offline.

Potassium Hydroxide: The largest liquid Potassium Hydroxide plant in the world is in Louisiana and still not running due to power outage. After shutting down two days prior to Ida, it is expected to be online again soon.

Ethylene Glycol: Approximately 10% of capacity is offline due to Ida. Additionally, Ida affected nearly 60% of capacity for feedstock Ethylene Oxide. Ethylene Glycol supply has been short for most of 2021. While there has been considerable effort to rebuild inventories this year, this now likely won’t be possible before 2022.

In addition to plant closures, Ida has impacted logistics on other key commodities as well as many downstream chemical markets such as paints and coatings, plastics, and etc.

For more information about Hurricane Ida’s affect on your chemical supply, speak to a representative.