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When will the decline in urea prices end? How is the post-winter storage of compound fertilizers? Author/Source: China Fertilizer Network Date: 2019-01-16 Clicks: 29 After New Year’s Day, a new year began, yet the festivities surrounding it did not lead to activity in the fertilizer market. The compound fertilizer market showed no signs of improvement, with a sense of uncertainty persisting; winter storage prices remained unclear and ambiguous. The prices of nitrogen, phosphorus, and potassium raw materials continue to fall, making it difficult for compound fertilizer manufacturers to sell their products. Downstream users are hesitant to stock up on large quantities of fertilizers, resulting in a rather awkward situation regarding the \"winter storage\" of compound fertilizers this year. The price of urea continues to fall. Since New Year’s Day, its price has been declining steadily. Currently, the standard ex-factory price of urea in Shandong is between 1830 and 1880 yuan per ton (the same applies below). In Linyi, the price at delivery is 1870–1880 yuan per ton. Although some companies still insist on a price of 1900 yuan for delivery in Linyi, actual transaction prices can often be negotiated. Market reports indicate that some large manufacturers are actually selling urea at around 1820 yuan per ton at the production level. Companies aim to stabilize the market, but due to poor demand from downstream buyers, there is room for negotiation in terms of prices. Recently, India has issued another tender, but the quantity and price of the urea to be supplied remain uncertain. Such efforts to boost the market seem insufficient. In the short term, urea prices will likely remain low. Such prices have caused those dealers who had stockpiled urea earlier to regret their decisions, as they have already incurred losses before even the peak trading period arrives. Some dealers who purchased urea early have suffered losses of up to 100 yuan per ton. Once bitten by a snake, one fears ropes for ten years; those distributors who have faced setbacks with urea also say they are unwilling and afraid to try storing compound fertilizers for winter, planning to wait and see market conditions after the Spring Festival. As a barometer of the compound fertilizer market, the price of urea has been on a downward trend. Meanwhile, the prices of phosphatic and potassic fertilizers, which are used as raw materials for compound fertilizers, are also low. The actual transaction price of 55% ammonium phosphate produced in Hubei is generally below 2,200 yuan per ton, with some lower-quality products selling for around 2,100 yuan per ton ； At the same time, the actual transaction price of 55% potassium sulfate powder produced using the Mannheim process in Hebei region also dropped to around 2,800 yuan per ton. The continuous decline in raw material prices has also placed significant pressure on compound fertilizer manufacturers to sell their products, causing most of them to stall in their development. After December, some companies tried to introduce preferential policies; there was more room for negotiation compared to earlier times, with discounts ranging around 50–100 yuan per ton. However, even though the actual transaction prices for compound fertilizers have dropped significantly, the end-users remain uninterested. Currently, the factory price of 45% sulfur-based general-purpose compound fertilizers has fallen to around 2300–2400 yuan per ton. In the Northeast region, the progress of fertilizer procurement by end-users is only about 20–30% of the usual level, and they are still waiting to see what will happen. However, many in the market still hold a slight hope for market conditions after the start of spring. There is a shortage of fertilizer reserves at the downstream level, and demand will surge during spring, leading to temporary peaks in certain areas. For compound fertilizer manufacturers, what they most desire is not a sharp rise in urea prices; nor do they want those prices to continue falling. If urea prices can remain stable through the Spring Festival, it would be a great blessing for compound fertilizer companies, as it would allow them to maintain normal sales levels. Therefore, most of these companies no longer expect price increases after spring begins; they are satisfied if sales volume can improve.