Salt price in asia started increasing

Pricing for industrial salt in the Asia Pacific for 2021-2022 seems to have an upward trend despite the uncertainty of the economic forecast.

Usually, industrial salt is contracted by CFR destination ports by bulk shipments, and chlor alkali producers in Japan, Korea and Taiwan are fixed by 1-2 years. 


According to market intelligence, major international salt suppliers from Australia, Mexico and India have agreed with buyers in Japan with an increase of salt price for the next 2-year. The level of increase seems to be 4-6% depending on the vessel size. 

There are 3 major factors of the price increase. Firstly the demand for bulk shipments in the next few years is expected to tighten up assuming gradual recovery from the COVID situation and continuing growth in China. Secondly, there is an urgent need for salt producers to improve FOB to invest in aging facilities and equipment that they have been postponing due to declined market price for the past 5 years. Lastly consecutive significant rainfall in India where it has been showing organic growth of salt export to China has caused a remarkable decline of export this year. It is expected to continue next year since solar salt operation takes a long time of the whole production cycle.

Fundamental issues that salt suppliers are facing are aging facilities and equipment, which eventually affects the productivity of salt such as declining salt harvesting rate per shift, reliability of haulage trucks and extending maintenance for washing plants. All these elements are causing an increase in unit costs. Besides, weak demand is also causing declining output, which ends up with an increase in unit cost due to the nature of high fixed costs in salt production.

Historically the outcome of price negotiations in Japan will be the benchmark for following negotiation in Korea and Taiwan. Judging from the current market circumstances, salt suppliers will have little choice but maintain a firm attitude toward price negotiation.