Recently, we had the opportunity to attend the Southwest Fertilizer Conference, held in Denver from July 16-20. We were glad to meet with many of our core manufacturers and discuss current and upcoming market changes, pricing, and supply chain challenges. We also discussed new products that we may add to the Alexander portfolio, and we were introduced to new supply partners.
Ammonia was at the top of the list of changing market conditions. This market has witnessed huge increases in the past few years, followed by a relatively quiet period. The two big drivers in this market are farming and natural gas pricing, both of which have had a lackluster year in 2023. However, eyeing the remainder of the year, we believe prices will increase slightly as the cost of natural gas increases when the cooler weather drives heating costs upwards. Additionally, the outlook for 2024’s crop production is much more positive than this year’s expectation, which may force more price increases in early 2024.
Next, Potassium Hydroxide was discussed in detail both in liquid form, as well as in flakes and briquettes (or walnuts). As a product primarily used in agriculture and airport deicing fluids, we expected to see lower costs this year due to the softness in both of those markets. However, due to the PVC markets declining, Chlor-Alkali producers are holding firm or even raising pricing on other products (such as KOH) to offset their losses in chlorine derivatives. We expect this market to remain steady, or perhaps face some price increases through the remainder of the year.
All of our meetings ended with discussions and commitments from our manufacturers on product availability. We are happy to report that we do not foresee any shortages with our inventory over the next year (or more). Alexander Chemical is positioned well in the marketplace and took great steps to strengthen relationships with suppliers in the past few challenging years. We are proud of the partnerships we have built and continue to foster through conferences like these.
One of Alexander Chemical’s key value propositions is continuity of the supply of our products, and price consistency throughout the year with those products. I am happy to report that we have the support of our manufacturers to continue to offer this value to our valued customers.
Vice President – Sales & Marketing