Just a reminder: it’s time to buy compound fertilizer after the 15th!

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Just a reminder: it’s time to buy compound fertilizer after the 15th! Author/Source: China Fertilizer Network Date: 2019-02-18 Clicks: 32 As the saying goes, customs vary from place to place. To this day, the festive atmosphere in the Northeast region remains strong, and it may not completely fade until after the 15th day of the first lunar month. Similarly affected by the Spring Festival holiday, fertilizer markets across the country came to a temporary halt; they have since started operating normally again, but have not yet seen a true recovery. With the approaching spring plowing season, many market participants can no longer stay still; when they will be able to obtain the goods is of great concern. 　　At present, there is indeed a significant shortage of some fertilizers needed for spring plowing in the market; if stock levels are not replenished in a timely manner, it may increase the risk of running out of products to sell. In an overall weak and volatile market, cautious approach is likely the choice for most distributors. However, with demand on the horizon, it is also important to act at the right time to prepare for any emergencies. Therefore, the compound fertilizer market is bound to see renewed activity after the Lantern Festival. 　　Firstly, raw material prices are volatile. The raw material market could not escape adversity after the holiday; nitrogen, phosphorus, and potassium fertilizers all saw price drops, with varying degrees of decline, leading to a generally pessimistic market atmosphere. Demand in the industrial and agricultural sectors is weak, supply is gradually increasing, the urea market remains stagnant, and no positive factors have emerged yet ； Yi’an ammonium continues to show weakness from the period before the holiday; there is a shortage of new orders, inventory levels are high, prices remain low, and the market is expected to stay weak in the short term ； There is currently a surplus of potassium chloride supplies at ports, domestic demand is limited, and prices are also under pressure. Faced with the complex trends in raw material prices, both upstream and downstream parties find it difficult to adapt. At the beginning of the market recovery period after the holiday, in an effort to increase sales volumes, some compound fertilizer manufacturers may offer highly competitive prices and favorable incentives. 　　Secondly, the downstream gap is slightly larger. The high prices of compound fertilizers ahead of the festival have severely undermined dealers’ confidence in stocking up, resulting in excess supply in some areas. It is understood that as of now, the amount of fertilizer stocked for spring plowing in the Northeast region may be only around 40% of that in previous years. Demand will eventually increase before the sales season begins, which could help boost the prices of compound fertilizers. Apart from the Northeast region, after the Spring Festival, the market for green-up fertilizers in the wheat-growing areas of the Central Plains officially kicks off, with an increase in centralized purchasing by end-users. Until production and transportation fully return to normal, the localized shortage of supplies will also contribute to price stability for compound fertilizers in the future. 　　Finally, supply might be tight. As mentioned above, the concentrated release of local demand can lead to a shortage in supply. At the beginning of this year, efforts to protect China’s ecological environment emphasized the need to complete the second round of central environmental inspections and follow-up checks within four years. Although most enterprises have met the standards for normal production after numerous environmental inspections, the increased pressure related to environmental protection will still impose a burden on these enterprises in terms of production ； Furthermore, transportation is equally important. It has been reported that recent heavy rain and snow in some areas of the south have made roads slippery, which will inevitably have a negative impact on the delivery of fertilizers. As a result, demand in the compound fertilizer market is set to increase in the coming time. 　　In summary, the fertilizer market started the year on a slow note, with a pessimistic atmosphere prevailing. As the spring plowing season approaches, an increase in demand might help improve market conditions. However, amid fierce market competition, price wars among companies are likely to intensify, and those in the downstream sector need to be cautious. (Feng Hongyang)