Those selling urea are excited; those selling ammonium are frozen

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Those selling urea are excited, while those selling ammonium nitrate are cautious. Author/Source: China Fertilizer Network. Date: February 27, 2019. Clicks: 9. By the end of February, spring plowing had begun in some areas; since the weekend, the prices of urea at certain manufacturers in Shandong and other regions have increased by 10–50 yuan per ton. Currently, the price for urea in Linyi, Shandong, is around 1900–1920 yuan per ton. Although most people believe that this increase in urea prices will be short-lived, as agricultural demand is likely to fade quickly, prices in the area around Guangdong have just started to rise, but due to still weak local agricultural demand, such price increases are not likely to happen for now. Although there is likely to be limited room for an increase in urea prices, given the gradual increase in the overall supply of urea, any activity in the market is still a good thing. Taking advantage of the demand from the agricultural sector, traders and distributors can indeed get excited and take action. Yi’an must be somewhat envious of the situation surrounding urea; after several months of a sluggish market, it remains frozen to this day. 　　So in what aspects is this \"freezing\" manifested? 　　Regarding prices. At present, the prices of monoammonium nitrogen compounds offered by enterprises have dropped by 50–100 yuan compared to before the holiday. The ex-factory price of 55% powdered monoammonium nitrogen compounds from large manufacturers in Sichuan was reduced by 50 yuan on two occasions after the holiday, reaching 2000 yuan; the actual transaction prices are close to these quoted amounts. The ex-factory price of 55% powdered monoammonium nitrogen compounds from smaller manufacturers in Yunnan has also dropped to 2000 yuan, with the transaction price subject to negotiation ； In Hubei, the actual export price for 55% ammonium sulfate powder is around 1,980 yuan at the lower end, while it is around 2,050–2,100 yuan for larger manufacturers. In the Shandong market, the price for 55% ammonium sulfate powder upon cash payment at delivery is 2,140–2,160 yuan; for 58% ammonium sulfate powder, it is 2,300–2,350 yuan, with prices approaching around 2,400 yuan before the holiday period. 　　On the demand side. The market conditions in the end-user sector have not improved since the holiday; there is little interest from local producers in the fertilizer market. By the end of February, agricultural demand in regions such as Shandong and the Two Rivers areas began to increase again due to improved weather conditions, but this demand mainly pertains to urea and other minor nitrogen-based fertilizers, and it has not yet helped to revitalize the overall fertilizer market. Sales in the compound fertilizer market remain weak; large-scale enterprises are operating at reduced capacity while small and medium-sized enterprises continue to shut down. As a result, compound fertilizer manufacturers remain cautious about purchasing ammonium nitrate as a raw material, with only some companies making moderate replenishments. Moreover, there have been deliveries guaranteed until the end of April, indicating that the buyer’s market currently holds the upper hand. 　　“\"Freezing\" is also evident in the supply side. The overall production level of ammonium nitrate is low; some smaller plants want to resume operations but are unable to do so due to issues such as lack of funds and high inventory levels. Even some larger plants operate at a relatively low level because of inventory pressures. Currently, the overall production rate of ammonium nitrate across the country remains at only 40-50%. The inventory accumulated before the holiday period, and even in the months leading up to it, has put ammonium nitrate producers in a difficult situation. Despite measures such as setting minimum prices, these efforts have not managed to significantly alleviate their challenges. 　　Regarding raw materials. Although sulfur prices remained relatively stable before and after the holidays, demand for sulfur at ports continued to be low, with prices staying below 1100 yuan. The price of sulfur at most domestic refineries dropped by at least 30 yuan compared to before the holidays. The price of sulfur from Puguang remained stable at a low level, at 1090 yuan at Wanzhou Port, while the price at the Dazhou refinery was 980 yuan ； Liquid ammonia, whose price started to drop before the holiday, continued to see a decline after it as well. Currently, the prevailing ex-factory price of liquid ammonia in Hubei is around 2550–2600 yuan, while the price upon delivery to storage has dropped to around 2800 yuan, representing a decrease of at least 200 yuan compared to before the holiday. It is evident that the supporting power of raw material costs is no longer sufficient. 　　In summary, rime doesn’t form in a single day; demand for ammonium nitrate will eventually improve over time. However, in the short term, it is unlikely that prices of ammonium nitrate will rise significantly, and there is still a risk of price declines in the near future.