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.