Lantern Festival Special: A Fat Pig Year in the Market – Are You Still Expanding?

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Lantern Festival Special: A Fat Pig Year in the Market – Are You Still Expanding? Author/Source: China Fertilizer Network Date: 2019-02-20 Clicks: 6 In the blink of an eye, the Lantern Festival has arrived. At present, the overall fertilizer market is in a bearish trend; similar to previous situations, the pace of progress remains somewhat slow. Although there is still some demand for nitrogen, phosphorus, potassium, and compound fertilizers, the cautious attitude among end-users persists as the prices of certain types of fertilizers have dropped. The enthusiasm to return to the market after the holiday period has not been as high as expected, and there are also increasing voices expressing lack of confidence in the future market. Large fluctuations in fertilizer prices can have negative effects on the market, especially when significant changes occur without any warning. Unlike the traditional fertilizer market today, the production and sales of water-soluble fertilizers have been improving recently, with their prices rising slightly as well. These fertilizers have managed to shed the label of being in high demand only during winter, and have become a new type of fertilizer widely accepted in many regions throughout all seasons. First, demand remains steady. Spring plowing is approaching, and there is a high demand for various types of fertilizers in the downstream areas. Normally, the demand for water-soluble fertilizers increases significantly during winter; however, unusually, the demand for such fertilizers is also considerable in other seasons. One reason for this is that traditional fertilizers are not as effective as water-soluble fertilizers, mainly because water-soluble fertilizers can dissolve completely in water, allowing plants to absorb them more easily. Additionally, the presence of various trace elements in these fertilizers enhances their effectiveness ； The second reason is the intense competition in the traditional fertilizer market, with limited profits from transactions. In an effort to maximize their profits, companies and distributors have sought alternative approaches by increasing investment and marketing efforts in water-soluble fertilizers. As a result, sales of water-soluble fertilizers are on the rise, both in the short term and in the long term. Secondly, the supply is adequate. At the beginning of the year, news regarding the second round of environmental inspections and follow-up checks had already surfaced, meaning fertilizer companies were bound to face pressure once again. Although authorities strictly prohibit practices such as a one-size-fits-all approach, this still affects the normal operation of production processes. After several rounds of environmental inspections, the production of water-soluble fertilizer manufacturers has largely met the required standards; some manufacturers that continued to violate the regulations were permanently shut down and eliminated from the market ； Furthermore, most enterprises resumed operations after the holiday; there are many that have plans to produce as well as those that are already in production. Before market demand increases significantly in the coming period, it is entirely possible to build up some inventory. Thus, with sustained demand and good supply conditions, the future for water-soluble fertilizers looks promising. Finally, shipments have resumed. Just before the Spring Festival holiday, logistics operations gradually came to a halt, which hindered the shipment of water-soluble fertilizers. Many companies were forced to limit new orders, and the market entered a brief period of calm. With the official launch of the market after the holiday, transportation in some areas has returned to normal. Companies can proceed with their previous orders, and there is a decent level of new order intake. I heard that recent heavy rain and snow in some areas of the south have created obstacles to goods transportation, but the weather in those areas is improving now, and transportation conditions will improve shortly. With these two factors, along with the resumption of shipments of water-soluble fertilizer products, the entire market system has been improved, leading to an increase in its popularity. In summary, the traditional fertilizer market had a poor start to the year. As there is a collective desire for a turnaround in the market, it would be wise to pay more attention to the performance of water-soluble fertilizers. The complementary relationship between demand and supply helps ensure the stable development of the water-soluble fertilizer market. (Feng Hongyang)