Summary Post on the Market Conditions and Prices of Compound Fertilizers in February 2017

The trading atmosphere in the diammonium phosphate market has cooled down. Author/Source: China Agricultural Inputs Distribution Association. Date: 2017-02-03. Clicks: 15. Last week (January 16–January 20), as the Spring Festival holiday approached, the trading atmosphere in the diammonium phosphate market weakened, and the local markets became relatively quiet. On January 23, China’s Phosphoric Acid Diammonium Wholesale Price Index (CPPI) was 2609.05 points, down 8.64 points on a month-on-month basis, representing a decline of 0.33% ； A decrease of 268.73 points on a year-on-year basis, representing a decline of 9.34% ； It dropped by 612.72 points from the base period, representing a decline of 19.02%. On January 23, China’s Phosphoric Acid Diammonium Retail Price Index (CPRI) was 2832.84 points, down 4.72 points on a month-on-month basis, representing a decline of 0.17% ； A decrease of 269.92 points on a year-on-year basis, representing a decline of 8.70% ； It dropped by 542.08 points from the base period, representing a decline of 16.06%. 　　Supply situation: Last week, companies focused on fulfilling pre-paid orders, and transportation activities also slowed down gradually. In terms of raw materials, the market prices of sulfur and phosphate rock have remained stable, with no significant change in the factors supporting these prices. Last Tuesday, the operating rates of ammonium sulfate manufacturers continued to remain stable; the average operating rate of key domestic companies was around 56.28%, remaining unchanged on a week-on-week basis. 　　Demand situation: As the Spring Festival holiday approaches, the domestic diammonium phosphate market has become increasingly sluggish over the past week. The downstream markets have entered Spring Festival mode in advance and have started to close down one after another. Traders have no intention of restocking at the moment, and there are few inquiries from end-users, resulting in a halt in shipments. In the international market, Pakistan has **restored subsidies for diammonium phosphate, which is likely to stimulate market demand in the short term. The Indian market remains calm, and measures are being prepared to curb further increases in diammonium prices. 　　International market: Last week, international diammonium phosphate prices rose sharply. In China, the FOB price is 351–361 US dollars per ton; compared to the previous week, the high and low end prices have increased by 10 US dollars per ton and 5 US dollars per ton respectively ； The FOB price in Port Tampa, USA is $329–$331 per ton, with increases of $8 per ton at both the lower and higher end ； In Morocco, the FOB price is $341–$351 per ton; prices for the higher and lower end ranges have increased by $10 per ton and $5 per ton respectively ； The FOB price for the Baltic Sea/Black Sea is $321–326 per ton, with increases of $5 per ton at both the lower and higher end. 　　Domestic market: According to data monitored by the association, last week prices of diammonium phosphate increased in most of the 20 provinces under observation, with fewer cases of price declines. Among them, the prices in seven provinces – Tianjin, Heilongjiang, Anhui, Shandong, Guangxi, Shaanxi, and Xinjiang – all increased, with the rise ranging from 9 to 225 yuan per ton; Guangxi had the highest increase ； Prices in Beijing, Hebei, and Henan all dropped, by 1–75 yuan per ton ； Prices in the remaining provinces remained stable. 　　The trading atmosphere in the diammonium market has cooled down; companies stick to their pricing, while demand from downstream buyers remains low. The current prices have dropped somewhat, but they are still not in line with market conditions. Due to a high volume of orders in the earlier period, most diammonium phosphate manufacturers continued to operate normally during the Spring Festival, but transportation disruptions led to no increase in supplies available in the market. As the Spring Festival holiday approaches, trading in the ammonium market is expected to become even slower next Tuesday, with a situation of supply existing but no demand persisting. (Gao Hongwei)

Inventory Check of Compound Fertilizers for Winter Storage – Author/Source: JLNCC – Date: 2017-02-03 – Clicks: 4. As can be seen from the chart above, the prices of the main raw materials used in compound fertilizers saw a significant rebound in the fourth quarter, with an especially clear upward trend starting at the end of October. According to data from Jinchuang, as of January 24, the price of small-grained urea in Shandong was between 1,640 and 1,670 yuan per ton, while the price of 55% ammonium phosphate powder in Hubei ranged from 1,900 to 1,950 yuan per ton. The price of 60% ammonium phosphate produced in salt lakes was 1,970 yuan per ton. These average prices represented increases of 39.83%, 24.53%, and 8.24% respectively compared to the prices at the beginning of October. Compared with the prices of the same period last year, the prices of urea and phosphate fertilizers have risen, while those of potash fertilizers have fallen; the increase in urea prices was as much as 400 yuan per ton. Frequent adjustments in raw material prices not only increase the difficulty of operating compound fertilizers but also enhance the close relationship between these fertilizers and their raw materials. 　　The market price trend is showing an upward shift. It is precisely the rising fluctuations in raw material prices that have contributed to a bullish atmosphere in the compound fertilizer market, driving the price trend upward. As of January 24, the ex-plant prices of key compound fertilizer manufacturers were 2,100–2,200 yuan/ton for 45%S3*15, and 1,900–2,000 yuan/ton for 45%Cl3*15. The average prices increased by 250–300 yuan/ton compared to early October, representing a rise of 15–16%. Compared with prices in the same period last year, sulfur-based compound fertilizers are still 50 yuan/ton lower, while chlorine-based compound fertilizers are relatively higher. However, this year the trend of the market has been exactly the opposite of last year’s; last year, the market started to decline in an erratic manner right from the winter storage period ； This year, the market trend has been upward step by step. 　　Increased frequency of price adjustments by manufacturing firms Due to factors such as environmental regulations and frequent fluctuations in raw material prices, firms have been making price adjustments more frequently this winter. Starting from the end of October, there have already been over 5 such adjustments, with the cumulative increase in prices exceeding 300 yuan per ton. In previous years, companies would usually set prepayment policy prices at the beginning of the winter storage period, and apart from any policy adjustments, these prices remained stable thereafter. It is evident that the compound fertilizer market is accelerating, and competition within the industry is intensifying. 　　In addition, driven by the continuous upward trend in the prices of compound fertilizers this year, dealers have become more motivated to stock up for winter use; in particular, small and medium-sized dealers have been active in purchasing fertilizers in batches. According to a distributor in the Northeast, due to factors such as lower prices during peak seasons in previous years and the fact that winter stockpiling was not profitable, they had no intention of stocking up in advance this year. However, with rising fluctuations in raw material prices and continuous increases in the manufacturers’ export prices, they have decided to stock up again; currently, more than 60% of their inventory has been stocked. 　　Overall, some new changes have emerged in the winter stockpiling of compound fertilizers this year. How will the market develop in 2017, and what characteristics will it show? Let’s keep following together. (Xu Shuxian)

The domestic phosphate fertilizer industry is showing signs of recovery. Author/Source: Date: 2017-02-03 Clicks: 2. With prices bottoming out and export tariffs being removed, the phosphate fertilizer industry is likely to see a recovery; we believe there is still room for a slight increase in phosphate fertilizer prices. Since early November 2016, the market price of diammonium phosphate (DAP) has risen by 11% (250 yuan/ton), reaching 2550 yuan/ton, while the market price of monoammonium phosphate (MAP) has increased by 26% (400 yuan/ton), reaching 1950 yuan/ton. On December 23, 2016, the Ministry of Finance issued the \"2017 Tariff Adjustment Plan,\" whereby the existing export tariff of 100 yuan per ton on DAP and MAP fertilizers was abolished. 　　View: Supply contraction alleviates the overcapacity pressure in the phosphate fertilizer industry: A sluggish market, lack of cost advantages, and stricter environmental regulations are likely to lead to the continued withdrawal of outdated production capacity. Phosphate fertilizer prices have been declining continuously since 2011, reaching their lowest level in the second half of 2016. In 2016, the overall operational rate of the phosphate fertilizer industry was at its lowest level in the past three years, with the latest operational rates for MAP and DAP being 52% and 55% respectively. According to industry statistics, since 2015, a total of 950,000 tons of MAP production capacity and 720,000 tons of DAP production capacity have been shut down on a permanent basis, accounting for 5.4% and 3.0% of the industry’s total production capacity respectively. Among the companies that ceased operations, those located in regions far from phosphate ore resources, such as the northwestern and central parts of the country, made up a large proportion. Our calculations show that the total costs for major companies producing MAP and DAP are currently around 1,800 yuan per ton and 2,200 yuan per ton respectively; before this round of price increases, most of those companies that did not have an advantage in terms of raw material supplies suffered from chronic losses. Furthermore, the safe disposal of phosphogypsum as a by-product is a major concern from an environmental perspective. As industry entry requirements and standards for pollutant control continue to tighten, small and medium-sized phosphate fertilizer manufacturers face increasing cost pressures, and some less efficient production facilities are likely to withdraw from the market. 　　There is virtually no new production capacity added domestically, and the industry’s production capacity will decline overall in the future. In 2015, the Ministry of Agriculture formulated the \"Action Plan for Zero Growth in Fertilizer Use by 2020,\" which called for keeping the annual growth rate of fertilizer use within 1% during the period 2015–2019, with the goal of achieving zero growth in fertilizer use for major crops by 2020. In the past three years, the capacity for phosphate fertilizers in China has grown slowly, and the addition of new production capacity has now come to a halt. According to industry statistics, there are no plans to build new production capacity in the near future. Taking into account the withdrawal of outdated production capacity, we expect a net reduction in production capacity in the phosphate fertilizer industry in the future. 　　Industry concentration has increased, and integrated leading enterprises enjoy a distinct advantage. The concentration in China’s phosphate fertilizer industry is continuously increasing; currently, the CR5 for MAP producers is around 35%, and the CR10 is around 57%. For DAP producers, the CR5 is about 62% and the CR10 is around 76%. Leading enterprises generally have access to upstream phosphate rock resources, giving them a clear advantage in terms of integration. Phosphorus ore resources in our country are scarce, and mining restrictions on them are strict; the approval process for converting exploration sites into mining sites alone takes 8 to 10 years, which objectively gives integrated enterprises a competitive advantage. 　　Leading enterprises voluntarily limit production to maintain prices. In mid-December 2016, the “6+2” meeting of the phosphate fertilizer industry was held, during which it was proposed that major companies should jointly reduce production by around 30% over the next year in order to alleviate the pressure of overcapacity. The day after the meeting, the leading DAP companies were the first to raise their prices, with other companies following suit; the price increase amounted to 200 yuan per ton. At the beginning of January 2017, the second round of industry’s “6+2” meetings was held to ensure stability in DAP prices during the period when they were to officially enter the retail sales stage after the Spring Festival. 　　Demand-driven factors underpin the short- to medium-term uptrend in the phosphate fertilizer industry: Global agricultural production drives a steady increase in demand for phosphate fertilizers. In the long term, by 2030, there is still room for growth in global planting areas and yields of key crops, which will effectively support the steady demand for phosphate fertilizers. 　　Export tariff incentives boost the competitiveness of domestic fertilizer exports. In 2017, export tariffs on urea and phosphate fertilizers were abolished, and the tax rate for ternary compound fertilizers was reduced from 30% to 20%. Against the backdrop of an overall overcapacity in China’s nitrogen fertilizer, phosphate fertilizer, and compound fertilizer industries, the complete removal of export tariffs on nitrogen and phosphate fertilizers, along with the reduction of export tariffs on compound fertilizers, will effectively help to absorb this excess domestic capacity. The main export destinations for phosphate fertilizers in our country include India, Brazil, Vietnam, Thailand, Pakistan, etc. Among them, DAP is mainly exported to India, while MAP is primarily exported to Brazil, Vietnam, and other countries. 　　(1) India’s import demand is expected to recover in 2017. India is the world’s second-largest consumer of phosphate fertilizers. Since the introduction of the new fertilizer subsidy policy (Nutrient Based Subsidy) in 2010, subsidies for phosphate and potash fertilizers have decreased. In the 2015/2016 fiscal year, India increased subsidies for phosphate and potash fertilizers for the first time; as a result, imports of phosphate fertilizers in that country rose sharply and inventory levels became high, which led to a decline in imports in 2016 as efforts were made to reduce those inventories. 　　According to statistics, India’s imports of DAP from April to November 2016 amounted to 4.108 million tons, a 28% decrease compared to 5.74 million tons in the same period of 2015 ； From April to December 2016, the cumulative sales volume of DAP was 6.9 million tons, a 8% decline on a year-on-year basis ； Inventory of DAP in India has dropped from a high of nearly 1.5 million tons in August 2016 to 1.1 million tons in January 2017. It is expected that India’s demand for phosphate fertilizers in 2017 will recover compared to 2016. 　　(2) Demand in Brazil is growing rapidly, and Chinese products are expected to increase their market share there. According to CRU’s projections, over the next 5 years, Brazil’s fertilizer consumption is expected to grow at an average annual rate of around 4.5%, ranking first among the world’s major agricultural producers. In 2016, Brazil’s imports of MAP reached 2.7 million tons, a 19% increase on a year-on-year basis. Among these, Chinese products, due to their lower price competitiveness, accounted for 159,000 tons in exports, representing a 55% decline compared to the previous year; their market share was only 6%. It is expected that with the elimination of export tariffs in 2017, Chinese products will become more price-competitive, allowing them to expand their market share in that region. 　　Demand for fertilizers ahead of spring plowing has begun in the domestic market. After the Spring Festival, the spring plowing season begins, leading to an increase in overall demand for fertilizers. MAP is mainly used in the production of compound fertilizers, and domestic compound fertilizer manufacturers have begun to purchase it in advance ； The market for diammonium fertilizers remains active. 　　Conclusion: Leading stocks in the phosphate fertilizer industry are recommended: Yiammonium Xinyangfeng and Sierte ； Diammonium Yuntianhua. 　　Risk Warning: Decline in prices of fertilizer products ； Spring plowing demand and export demand fell short of expectations ； The supply-side reform in the industry fell short of expectations. (CFCN)

Be Cautious When Exporting Diammonium Fertilizer Author/Source: China Fertilizer Network Date: 2017-02-06 Clicks: 25 As old years give way to new ones and festivals arrive, the diammonium fertilizer market continues to operate; factories have large quantities of products ready for shipment. Although production does not stop during these holidays, the operational rate decreases slightly. There is a significant demand gap, and most factories say that there will be limited new orders in the short term, with a strong tendency to maintain high prices； Internationally, prices have also entered a period of rebound, as shown in the figure below. As can be seen from the figure, international prices for diammonium phosphate began to rise starting from mid-November last year. As of this week, the ex-ship price in China for 64% diammonium phosphate has risen to $345–360 per ton, while the CIF price in India has reached $340 per ton. Some in the industry say that an export counteroffensive regarding diammonium phosphate has officially begun. However, given the current market situation, there are still several factors that the industry needs to keep in mind: First of all, the actual transaction prices at the export level have not yet reached these levels. As can be seen from the chart above, the price of diammonium phosphate is on the rise. Meanwhile, these two prices indicate that China’s exports of diammonium phosphate to India are currently very low. India’s subsidies for diammonium phosphate remain undecided. Although Chinese diammonium phosphate manufacturers plan to reduce production by 5 million tons this year and there are plans to eliminate export tariffs, India has also increased its self-sufficiency in this area. According to international reports, India’s actual production of diammonium phosphate last year was ** million tons higher than the year before. If you have any questions regarding the analysis and market data presented here, you can contact us at the hotline 0451-88001128. With the positive and negative factors offsetting each other, the path ahead for Chinese diammonium phosphate in the international market is not easy. 　　Secondly, the international market has not yet started operating. As per past practice, India will announce this year’s subsidies for diammonium phosphate in March, and after April arrives, negotiations between China and India will begin. At that time, domestic market prices will have a certain impact on the prices discussed in those negotiations. Although domestic companies are currently inclined to maintain high prices, there are no actual sales at the higher end of the price range; factories continue to ship out orders. It is reported that some large manufacturers give priority to shipping orders based on the prices of already finalized deals, one reason being that companies that produce goods at lower prices suffer losses ； Secondly, the factory also tries to delay the introduction of low-cost products into the market; this not only ensures the sales through its own agents but also helps maintain stability in the prices set by the company ； However, there are also risks associated with this approach. For instance, if demand weakens in the future and low-priced supplies enter the market, it is likely that the price of diammonium phosphate will not be able to remain stable, and there is a risk of a decline in its price. Similarly, export prices may also struggle to stay stable. 　　Finally, there is still an overcapacity in the domestic market. Based on the production cuts agreed upon by companies at previous meetings, China’s total capacity for diammonium phosphate is around 18 million tons or more. This year, however, falling grain prices have reduced the enthusiasm of some farmers in the Northeast to grow corn, so the apparent consumption level is likely to decrease, leaving a surplus issue persisting. 　　Although there are still some positive factors surrounding Chinese diammonium fertilizers on the international stage, there are also certain immutable factors. To stay informed about the current trends in the fertilizer market, please continue to follow China Fertilizer Network. (Wu Wenchao)

Compound Fertilizers: Prices Remain Stable with Low Shipments; Prices to Rise After the Lantern Festival Author/Source: Date: 2017-02-06 Clicks: 20 With the end of the Spring Festival holiday, most compound fertilizer manufacturers have resumed operations, focusing on training; shipments remain low and there are few new orders. The upstream raw material market is largely in a state of consolidation, with costs associated with the production of compound fertilizers still providing support ； Sales in the downstream markets are moving slowly; most areas are still on holiday, trading has not yet begun, and there is a strong sense of caution among market participants. 　　It is understood that the ex-factory price of 45%S (15-15-15) in Shandong region is around 2100–2560 yuan per ton, while the ex-factory price of 45%CL (15-15-15) is 1900–2000 yuan per ton ； The mainstream ex-factory price for 45%S (15-15-15) in Anhui region is 1,980–2,150 yuan per ton ； The reference price for 45%S (15-15-15) in Hubei region at the factory is 2000–2160 yuan per ton ； In the Jiangsu region, the ex-factory price of 45%CL (15-15-15) is 1,850–1,960 yuan per ton, while the ex-factory price of 45%S (15-15-15) is 1,950–2,100 yuan per ton. Affected by the Spring Festival holiday, the compound fertilizer market in most areas has not yet started to operate; dealers are mainly waiting to observe market conditions, with digesting previous inventory being a secondary focus, and there are no plans to take on new orders at this time. 　　Additionally, stable prices of upstream raw materials provide favorable support for the production costs of compound fertilizers. It is expected that the prices of compound fertilizers will remain stable in the short term, with some companies possibly raising their prices slightly after the Lantern Festival. (Zhuochuang Information)

At the beginning of the new year, it is said that DAP producers are eager to raise their prices. Author/Source: Date: February 7, 2017. Click-through rate: 21. As the old year gives way to the new, the DAP market continues to operate. Manufacturers have a considerable amount of inventory ready for shipment. Although production did not halt during the holiday period, the operating rate saw a slight decline. There remains a significant gap between supply and demand. Most manufacturers report that they expect only limited new orders in the short term. Influenced by factors such as production cutbacks and tight supply, some large enterprises still intend to raise their prices. 　　The diammonium phosphate market is developing steadily after the holiday, with companies actively seeking orders. At present, domestic sales by diammonium phosphate manufacturers are mainly based on shipments, while exports are being prepared for shipment to ports; large companies are gradually fulfilling their export orders. Currently, the export quote price for diammonium phosphate in China has risen to $355–365 per ton FOB, and companies are actively inquiring about orders. 　　In terms of price, Hubei-based brands offer 64% diammonium phosphate at 2,400 yuan per ton at the factory level, with higher-end prices at 2,450 yuan per ton; new orders have basically come to a halt. For the Southwest brand’s 64% diammonium phosphate, the price upon arrival in the Northeast is 2650–2750 yuan per ton, with pre-payment for orders required. 　　In terms of the market, downstream traders have not entered the market yet, and prices upon arrival at various locations remain at the levels seen before the holiday. Based on the reference quotes, the price for 64% diammonium fertilizer upon arrival in the Northeast is 2550–2790 yuan per ton ； The arrival price in Gansu is 2,500–2,600 yuan per ton ； In Xinjiang region, 64% of the diammonium fertilizers arriving at the ports are priced at 2600–2800 yuan per ton ； In the Shandong market, the arrival price of 64% diammonium phosphate is around 2,550 yuan per ton. 　　Overall, the international market has not yet started to function. As per past trends, India will announce this year’s subsidies for diammonium phosphate in March; after April arrives, China and India will enter negotiation phase, during which domestic market prices will have a certain impact on the prices discussed in those negotiations. Although domestic companies currently show a strong tendency to maintain high prices, there are no actual sales at these high market prices. Factories continue to ship out orders; it is reported that some large manufacturers prioritize shipping those orders whose prices have already been agreed upon. However, this approach also carries risks – if demand weakens in the future and goods available at lower prices enter the market, there is a risk of a decline in the prices of diammonium fertilizers, and it may be difficult to keep export prices stable as well. 　　Excess capacity remained a issue in 2017; the domestic market continued to have excess production capacity. Based on the production cuts agreed upon by companies at previous meetings, China’s total capacity for diammonium phosphate is around 18 million tons or more. This year, however, falling grain prices have reduced the enthusiasm of some farmers in the Northeast to grow corn, so the apparent consumption level is likely to decrease, leaving a surplus issue persisting. Although Chinese diammonium phosphate still has certain advantages on the international stage, there are still some immutable factors at play. 　　The holiday period has just ended, and corporate sales activities have not yet fully resumed; downstream traders are still out of business, so the diammonium market remains in the same state as it was before the holidays. The current export market is favorable, and companies are inclined to maintain high prices; it is expected that the price of diammonium phosphate will remain high in the short term, with little possibility of a price decline. (China Agri-Media)

Compound fertilizers are showing a significant downward trend in price. Author/Source: Agricultural Inputs News. Date: 2017-02-07. Clicks: 20. Starting from last November, due to factors such as costs, transportation, and environmental regulations, the prices of raw materials used in compound fertilizers rose sharply, causing the prices of these fertilizers to increase by over 300 yuan per ton. The three main factors that drove up the prices of these raw materials have now basically disappeared, so it can be inferred that this year as well, compound fertilizers will likely see their prices drop when they are needed. 　　The current prices of nitrogen and phosphorus fertilizers are both higher than their costs, and the industry’s operating rate is gradually increasing. Potash fertilizers are based on large-scale contract prices as a reference, and these prices are also nearly 400 yuan/ton higher than import prices; as a result, the prices of the main raw materials used in compound fertilizers lack cost support. 　　The author had predicted that the transportation situation would improve in March, but according to the latest reports from People’s Daily Online, from the end of December to February 4th, Jincheng in Shanxi sent out nearly 40,000 tons of urea per day using freight cars, with an unrestricted supply of such cars for transporting fertilizers. The three main types of goods transported by China’s railways are coal, grain, and fertilizers. Coal and grain have been largely transported already; aside from the Spring Festival travel rush, there is sufficient capacity available to ensure the transportation of fertilizers at present. In recent days, the price of urea transported by Shanxi Transportation has risen sharply, indicating that railway transportation capacity has improved significantly, and that transportation issues are no longer a factor driving up the prices of fertilizers. 　　Since December last year, many areas across the country have experienced severe foggy weather on repeated occasions. Environmental protection agencies have launched emergency response measures on multiple occasions, resulting in fertilizer production plants having to operate intermittently; ultimately, it was the change in weather that helped disperse the fog. Since the Spring Festival, severe foggy conditions have occurred again in the Beijing-Tianjin-Hebei-Shandong-Henan region, yet environmental protection authorities have not activated any emergency response mechanisms. This may indicate a change in the approach to environmental management: adopting emergency measures to deal with routine environmental problems not only proves ineffective but also affects the stable operation of the entire economy. As a result, a longer-term strategy has been adopted, which has led to a steady increase in the operating rate of fertilizer production plants. 　　What is most concerning is that this rise in fertilizer prices is occurring despite a potential sharp decline in demand: corn prices remain at historic lows, and the area dedicated to corn cultivation will decrease significantly this year ； In 2016, exports of urea decreased by 35.48% compared to 2015, those of diammonium phosphate dropped by 15.21%, and those of monoammonium phosphate fell by 26.11%. With the commissioning of new production capacities for urea and phosphate fertilizers internationally, it is expected that China’s fertilizer exports will decline further this year. This year, China’s nitrogen and phosphate fertilizer industry will face the challenging situation of declining both export volumes and domestic demand. 　　After the previous decline in nitrogen and phosphate fertilizers, although some production capacity left the market, there is still a severe overcapacity. Although the supply of fertilizers in the early stage was reduced due to three factors – cost, transportation, and environmental concerns – this situation gave rise to optimistic expectations in the market. Once these three factors are no longer a problem, the operating rate of the fertilizer industry will surely increase, and the market will once again experience a situation where supply exceeds demand. 　　The situation is even more severe for potassium fertilizers that rely partly on imports: there are still nearly 2 million tons in stock at the ports, while production companies in areas such as Qinghai had inventory amounts of up to 3 million tons by the end of December last year. Taking into account subsequent production volumes, even if no imports occur during the first half of the year, domestic supply will be more than sufficient. Potash fertilizer prices have risen by as much as 400 yuan per ton since last year’s low point; this increase is not caused by a shortage, but rather by poor logistics for domestically produced potash fertilizer, which creates opportunities for potash fertilizer at ports. With the shift in policy from ensuring coal and food supplies to ensuring the transportation of agricultural production materials, domestically produced potash fertilizer will flood the market, and a significant drop in its price is likely to occur soon. 　　From quantitative change to qualitative change, in terms of time, the author boldly predicts that a round of price cuts is inevitable by the time farmers actually start using compound fertilizers. (Yu Lei)

Compound Fertilizers: Exports in 2017 May Be Promising. Author/Source: China Fertilizer Network. Date: 2017-02-07. Clicks: 18. Since 2017, the prices of compound fertilizers in China have been on the rise. Internationally, export prices for such fertilizers in China have remained stable since last November. However, in early January, the spot export price of 45% sulfur-based compound fertilizers increased by 50 yuan per ton, reaching 1900–2000 yuan per ton. By late January, it rose again by 50 yuan per ton, reaching 1950–2050 yuan per ton. Some fertilizer export companies in Jiangsu Province reported an improvement in sales. Industry experts attribute this gradual recovery in export trends to two main factors. 　　Firstly, raw material prices are high**, leading to increased costs and steady prices for compound fertilizers in the domestic market. After the Spring Festival holiday, urea prices rose slightly in some areas, while phosphatic and potassic fertilizer prices remained relatively stable. Although the increase in raw material prices was not as sharp as in the fourth quarter of 2016, domestic compound fertilizer prices continued to show a trend of steady or slight increases. It is understood that most compound fertilizer manufacturers have already completed the collection of payments related to winter stockpiling, and demand in the spring is about to increase. As purchasing activities on the downstream side pick up, domestic prices for compound fertilizers are expected to see further increases in the short term. As a result of rising costs and persistently strong domestic prices, the export prices of compound fertilizers in our country have also increased. 　　Secondly, tariff reductions help compound fertilizer companies with their exports. Looking back at 2016, according to customs statistics, the total export volume of ternary compound fertilizers in China from January to December was 8,400 tons, representing a decline of 88.4% compared with the same period in 2015 – less than a fraction of that figure. In the first three quarters, the total export volume of binary compound fertilizers was 483,300 tons, a decrease of 232,300 tons compared with the same period last year, resulting in a decline rate of 32.46%. Overall, throughout 2016, China’s exports of compound fertilizers saw a decline in both volume and price. http://img8.fert.cn/image/20170207/20170207153125202520.png On December 23, 2016, the Tariff Commission of the State Council issued the \"2017 Tariff Adjustment Plan\", which came into effect on January 1, 2017. The details regarding tariffs on fertilizer exports include: 1) Elimination of export tariffs on nitrogen-based fertilizers such as urea and ammonium chloride, as well as phosphorus-based fertilizers such as ammonium phosphate and calcium carbonate, throughout the year ； 2) The annual export tax rate for ternary compound fertilizers was reduced from 30% in 2016 to 20% ； 3) The annual export tax rate for potassium chloride and potassium sulfate remains at 600 yuan per ton ； Fertilizers such as potassium nitrate and compound phosphorus-potassium fertilizers maintain an annual export tax rate of 5%. The reduction in the export tax rate for triple-component fertilizers has, to some extent, lowered the costs for companies to export such fertilizers, thereby encouraging Chinese fertilizer manufacturers to expand into overseas markets. Moreover, the main destinations for China’s compound fertilizer exports are Southeast Asian markets, such as the Philippines and India. The export tax rate for NPK compound fertilizers has been reduced from 30% to 20%. Taking the aforementioned export price as an example (the FOB price for 45% sulfur-based general-purpose compound fertilizer is 2,000 yuan per ton), if exports continue at this price level this year, the export tariff will be lowered by approximately 130 yuan per ton. Overall, this change is beneficial for compound fertilizer manufacturers seeking to expand into Southeast Asian markets, where the crop cultivation patterns and fertilizer usage habits are quite similar to those in southern China. Furthermore, the **Belt and Road Initiative** has effectively strengthened cooperation between our country and other nations, while also boosting the export of binary and ternary compound fertilizers from our country. 　　Overall, the reduction in tariff policies will provide some positive support for the export situation of compound fertilizers in China in 2017; at the same time, compound fertilizer manufacturers are also optimistic about this year’s export market. 　　(Li Qingling)

After the Spring Festival, will compound fertilizers face a wave of price cuts? Author/Source: Agricultural Materials Herald Date: February 8, 2017 Click-through rate: 21 Since November last year, due to factors such as costs, transportation, and environmental protection, the prices of raw materials for compound fertilizers have seen a significant rise. This has caused the quoted prices of compound fertilizers to increase by over 300 yuan per ton. Currently, the three main factors driving up raw material prices have largely dissipated; therefore, it can be concluded that this year, compound fertilizers will still likely see price drops when they become necessary for use. 　　The current prices of nitrogen and phosphorus fertilizers are both higher than their costs, and the industry’s operating rate is gradually increasing. Potash fertilizers are based on large-scale contract prices as a reference, and these prices are also nearly 400 yuan/ton higher than import prices; as a result, the prices of the main raw materials used in compound fertilizers lack cost support. 　　The author had predicted that the transportation situation would improve in March, but according to the latest reports from People’s Daily Online, from the end of December to February 4th, Jincheng in Shanxi sent out nearly 40,000 tons of urea per day using freight cars, with an unrestricted supply of such cars for transporting fertilizers. The three main types of goods transported by China’s railways are coal, grain, and fertilizers. Coal and grain have been largely transported already; aside from the Spring Festival travel rush, there is sufficient capacity available to ensure the transportation of fertilizers at present. In recent days, the price of urea transported by Shanxi Transportation has risen sharply, indicating that railway transportation capacity has improved significantly, and that transportation issues are no longer a factor driving up the prices of fertilizers. 　　Since December last year, many areas across the country have experienced severe foggy weather on repeated occasions. Environmental protection agencies have launched emergency response measures on multiple occasions, resulting in fertilizer production plants having to operate intermittently; ultimately, it was the change in weather that helped disperse the fog. Since the Spring Festival, severe foggy conditions have occurred again in the Beijing-Tianjin-Hebei-Shandong-Henan region, yet environmental protection authorities have not activated any emergency response mechanisms. This may indicate a change in the approach to environmental management: adopting emergency measures to deal with routine environmental problems not only proves ineffective but also affects the stable operation of the entire economy. As a result, a longer-term strategy has been adopted, which has led to a steady increase in the operating rate of fertilizer production plants. 　　What is most concerning is that this rise in fertilizer prices is occurring despite a potential sharp decline in demand: corn prices remain at historic lows, and the area dedicated to corn cultivation will decrease significantly this year ； In 2016, exports of urea decreased by 35.48% compared to 2015, those of diammonium phosphate dropped by 15.21%, and those of monoammonium phosphate fell by 26.11%. With the commissioning of new production capacities for urea and phosphate fertilizers internationally, it is expected that China’s fertilizer exports will decline further this year. This year, China’s nitrogen and phosphate fertilizer industry will face the challenging situation of declining both export volumes and domestic demand. 　　After the previous decline in nitrogen and phosphate fertilizers, although some production capacity left the market, there is still a severe overcapacity. Although the supply of fertilizers in the early stage was reduced due to three factors—costs, transportation, and environmental concerns—which also gave rise to optimistic expectations in the market, once these three factors are removed, the operating rate of the fertilizer industry will inevitably increase, and the market will surely return to a situation where supply exceeds demand. 　　The situation is even more severe for potassium fertilizers that rely partly on imports: there are still nearly 2 million tons in stock at the ports, while production companies in areas such as Qinghai had inventory amounts of up to 3 million tons by the end of December last year. Taking into account subsequent production volumes, even if no imports occur during the first half of the year, domestic supply will be more than sufficient. Potash fertilizer prices have risen by as much as 400 yuan per ton since last year’s low point; this increase is not caused by a shortage, but rather by poor logistics for domestically produced potash fertilizer, which creates opportunities for potash fertilizer at ports. With the shift in policy from ensuring coal and food supplies to ensuring the transportation of agricultural production materials, domestically produced potash fertilizer will flood the market, and a significant drop in its price is likely to occur soon. 　　From quantitative change to qualitative change, in terms of time, the author boldly predicts that a round of price cuts is inevitable by the time farmers actually start using compound fertilizers. (Yu Lei)

Shortage of phosphate ammonium: Price increase mode activated! Author/Source: Agri-Materials Guide Date: 2017-02-08 Clicks: 21 Since January, there have been few new orders for phosphate fertilizers, with companies focusing on fulfilling existing pre-paid orders. In mid-December 2016, the “6+2” meeting for the phosphate fertilizer industry was held. The meeting proposed that over the next year, major companies should jointly reduce production by around 30% in order to alleviate the pressure of overcapacity. The following day, the leading diammonium fertilizer manufacturers were the first to raise prices, with other companies following suit; the price increase amounted to 200 yuan per ton (the same unit is used throughout). At the beginning of January this year, the second round of the “6+2” meetings for the phosphate fertilizer industry was held to ensure stable prices for diammonium phosphate in the retail market after the Spring Festival. After the meeting, some companies raised their quotes by 100 yuan. 　　Monoammonium phosphate: After New Year’s Day, the domestic monoammonium phosphate market lacked momentum to rise further, with the overall market remaining stable. After the environmental inspections, some small factories planned to resume operations in early January, but the start date was postponed due to high raw material prices. As demand weakens, the market price of monoammonium remains stable with a slight decline, while prices for higher-end products have dropped. As the Spring Festival approaches, a few small enterprises collect payments before the holiday, which leads to a slight decline in factory prices in certain areas; moreover, as some distributors are eager to convert their assets into cash, the prices at which goods are sold also drop. 　　Although companies that rely on vehicle transportation stopped operations during the Spring Festival, judging from the current order volume of these companies, large manufacturers have sufficient orders, with all pre-orders scheduled through February, while smaller manufacturers face greater pressure to close deals. Although the price of monoammonium nitrate declined in some areas in mid-to-late January, large manufacturers maintained firm quotes. In January, the average ex-plant price of 55% powdered monoammonium was 1,966 yuan, up 1.60% on a month-on-month basis and 6.04% on a year-on-year basis ； The average wholesale price was 2,001 yuan, up 2.092% on a month-on-month basis and 2.35% on a year-on-year basis. 　　In terms of raw material prices, aside from phosphorus ore, the prices of synthetic ammonia and sulfuric acid have both risen significantly; the ex-plant price of synthetic ammonia in Hubei has now exceeded 2,900 yuan. Some industry insiders believe that phosphorus ore prices will rise slightly after the holiday, with raw material costs providing strong support for the cost of monoammonium phosphate. Therefore, it is expected that after the Spring Festival, the price of monoammonium phosphate will find it difficult to drop significantly due to cost support, remaining generally stable with only slight adjustments in some areas. 　　Diammonium: In January, diammonium manufacturers were mainly focused on shipping goods; there were plenty of orders received in advance, while new order transactions were virtually at a standstill. Driven by factors such as rising raw material prices and persistent supply shortages, diammonium fertilizer manufacturers are highly determined to maintain high prices. In January, the average ex-plant price of 64% diammonium fertilizer in the domestic market was 2,350 yuan; it was 2,183 yuan in December 2016, and 2,475 yuan in January 2016. There was a month-on-month increase of 7.65%, while the year-on-year decrease was 5.05%. 　　The current grassroots fertilizer market remains in a Spring Festival atmosphere; new orders for diammonium phosphate have essentially ceased, and there is severe shortages in various regions. The end-market will be launched gradually in the near future, prompting traders to place new orders for replenishment. Currently, the quotes offered by diammonium manufacturers are on the high side, and these prices are not in line with market conditions, making them meaningless. Industry experts believe that the diammonium phosphate market will see concentrated purchasing after the Spring Festival, and in order to encourage downstream companies to restock, prices for diammonium phosphate are likely to drop slightly. 　　Internationally, phosphatic fertilizer prices rose overall in January. At the beginning of January, the Indian RCF company planned to launch a tender for phosphate fertilizers, in a total quantity of 20,000 tons. The Saudi phosphate fertilizer market is active; Maaden has reached a deal with Bangladesh for 225,000 tons of diammonium phosphate, while Sabic sells phosphate fertilizers to East Asia and East Africa. Furthermore, Pakistan **first announced the cancellation of the diammonium fertilizer subsidy policy, only to later announce its reinstatement. (Hu Xiaoshan)