Thread Content
Since March, international geopolitical tensions have continued to intensify. Coupled with the intensive fertilizer preparation for spring farming in China and increased overseas purchases, there has been a strong demand for ammonium sulfate both domestically and for export, driving prices upward and pushing them to record highs in recent years. According to statistics, as of early May this year, the overall price of ammonium sulfate in the domestic market has risen by over 60%, with the price of high-purity products increasing by more than 80%. However, starting from mid-May, the positive factors supporting the ammonium sulfate market weakened significantly, and the market shifted from an upward trend to a phase of consolidation. “After mid-May, the peak period for fertilizers used in spring plowing came to an end, orders for overseas exports slowed down, and signs of weak demand from downstream industries that use ammonium sulfate became increasingly evident. On May 15, the price of coking-grade ammonium sulfate in China’s main production areas had dropped to around 1,300 yuan per ton (the same unit is used hereafter). Although the price of high-purity products remained relatively high, it too began to decline. It is expected that the market for ammonium sulfate will return to a state of rational adjustment, with the price gap between high-quality and low-quality products continuing to narrow. ”Shao Huiwen, a senior market commentator, provided the above analysis. The peak season for spring plowing has come to an end, resulting in a decline in demand from downstream industries. According to Liu Changqing, a agricultural supplies dealer from Xiayi County in Henan Province, March and April represent the optimal period for using fertilizers during spring plowing in the three key agricultural regions of North China, Northeast China, and Northwest China. This leads to increased activity among compound fertilizer manufacturers, which in turn triggers bulk purchases of ammonium sulfate as a raw material, thereby sustaining high market demand. By mid-May, spring sowing operations across the country had been fully completed, entering the traditional off-season for agricultural fertilizers, which led to a rapid decline in the seasonal demand for ammonium sulfate. Data from Longzhong Information Monitoring show that in mid-May, the operating rate of domestic compound fertilizer manufacturers dropped significantly to around 36%. Resistance to high-priced ammonium sulfate continued to increase, and the market’s tendency to buy when prices are rising and avoid buying when they fall grew stronger. Manufacturers shifted from making necessary purchases to ordering supplies only cautiously as needed, resulting in a significant reduction in demand for ammonium sulfate in agricultural applications. In addition to weakening agricultural demand, the industrial sector has also failed to provide effective support. In the past two years, the industrial applications of ammonium sulfate have continued to expand, with strong demand in areas such as rare earth extraction, lithium battery material recycling, and pharmaceutical synthesis. However, starting from 2025, affected by factors such as weak demand from end-users, the operating rates of key downstream industries that use rare earths and titanium dioxide have continued to decline, leading to a significant reduction in purchases of ammonium sulfate; as a result, the potential for growth in industrial demand continues to shrink. As an important component of the domestic demand market, if industrial demand fails to stabilize and show improvement, it will continue to put pressure on the ammonium sulfate market in the future. Slowing export orders and weakening external support: China is the world’s largest producer and exporter of ammonium sulfate. This year, due to the geopolitical conflicts in the Middle East, there was a surge in India’s demand for nitrogen fertilizers, which led to an increase in both the volume and price of ammonium sulfate internationally. This became the key external factor behind the sharp rise in ammonium sulfate prices in that country. However, as May arrived, the international nitrogen fertilizer market returned to a more rational state; international urea prices declined from their high levels, and a bearish sentiment among overseas buyers spread rapidly, resulting in a significant weakening of the external support for ammonium sulfate. Judging from recent international bidding trends, a downward trend in the ammonium sulfate market is evident. The production cost of high-purity ammonium sulfate has dropped to around 1,700 yuan, resulting in a significant disparity compared to current domestic spot prices. This has led to a sharp reduction in profits from foreign exports, with some cases even reaching a point where no profit is left. Zhang Yi, a trader of ammonium sulfate in Shandong, said that based on actual overseas transaction data, the lowest purchase price for granular ammonium sulfate in the Brazilian market is 245 dollars CFR per ton; the cost upon arrival in China is only 1,480 yuan, which is already lower than the current domestic spot price for coking-grade ammonium sulfate. There is still room for further declines in the price of ammonium sulfate in China in the future. In addition, market rumors suggest that policies regarding the import and export of ammonium sulfate will be adjusted, which has become a major factor undermining confidence in the industry. If such policies are put into effect, the customs clearance process for ammonium sulfate exports is likely to become longer, leading to increased costs for clearance and testing. Export efficiency will also decline, which directly limits companies’ ability to take on export orders and thus puts pressure on domestic prices of ammonium sulfate. The current cautious attitude in the market is also largely influenced by expectations regarding relevant policies. Supply is expected to grow, resulting in a relatively loose supply-demand balance. While demand continues to weaken, the supply of ammonium sulfate is on the rise steadily; the previously tight supply-demand balance has been completely disrupted, and this is the main reason behind the decline in prices. According to Longzhong Information’s monitoring, the current operating rate of the domestic coking industry is 76.06%, with the monthly production of coking-grade ammonium sulfate remaining at around 440,000 tons, representing a 4% increase on a year-on-year basis; thus, the supply of basic-grade products is quite sufficient. The operating rate of the caprolactam industry is around 73%, and the production of high-purity ammonium sulfate remains stable, with a consistent supply of high-end products available. It is worth noting that in June, new production capacity will be introduced in China’s coal chemical industry, which will further increase the overall supply of ammonium sulfate. For example, the Datang Fuxin coal-to-natural gas project is about to enter the commissioning phase. Once this project comes online, it will increase the production capacity of ammonium sulfate. Coupled with the high operating rates in the coking industry, it is expected that the overall supply of ammonium sulfate in China will continue to rise in the future. In contrast, domestic demand in the agricultural and industrial sectors has weakened simultaneously; overseas export orders have slowed down and profits have turned negative. As a result, the supply-and-demand balance in the ammonium sulfate market has shifted from a tight balance to a more relaxed one, and it is inevitable that prices will return to a state of fluctuation and consolidation. Furthermore, from an inventory perspective, market pressure in the ammonium sulfate sector is also continuing to build up. As of May 14, the total inventory of ammonium sulfate samples at key domestic ports amounted to 820,000 tons, an increase of 70,000 tons compared to the previous week. The ongoing accumulation of inventory in ports, along with the inability to effectively distribute the goods arriving at these ports, will directly put pressure on the domestic spot market, serving as a key factor driving down the prices of ammonium sulfate. Industry experts analyze that, taking into account various factors such as current market supply and demand, foreign trade conditions, policy expectations, and inventory pressures, the sharp upward trend in ammonium sulfate prices has essentially come to an end; the market has now entered a phase of competition between buyers and sellers, with rational price adjustments taking place. It is expected that the price of high-end ammonium sulfate will continue to fall in the future, with the price gap between high-end and low-end products narrowing further.