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Attention! An “earthquake” in the market for compound fertilizers in the Northeast region? Author/Source: China Fertilizer Network Date: 2019-03-08 Clicks: 3 On March 8th, the annual International Women’s Day arrived, and all the staff at China Fertilizer Network wish all women a happy holiday. But what is the connection between International Women’s Day and fertilizer market trends? Some industry insiders joked that in early 2019, the fertilizer market was in a stalemate with slow demand growth; the main reason for this was that women currently hold control over economic matters in society, and it is only on International Women’s Day, when all women are celebrated, that they will allocate funds from their households to purchase fertilizers. Jokes aside, the fertilizer market in the Northeast region has indeed shown some signs of revival recently, but the market conditions are quite surprising! It is entirely appropriate to use the term “minor earthquakes” to describe the recent trends in the fertilizer market in the Northeast. Recent rumors suggested that prices of compound fertilizers and blended fertilizers in this region have dropped significantly, by 100–200 yuan per ton. Accurate investigations conducted by China Fertilizer Network confirmed that such changes indeed exist in the Northeastian market: some local companies have reduced the prices of their compound fertilizers by 100 yuan per ton. In some cases, the price of 45% sulfur-based compound fertilizers reached 2400 yuan per ton upon arrival in the region. Additionally, the prices of blended fertilizers offered by certain companies have also dropped substantially compared to last year. Last year, the price of blended fertilizers was around 49–50 yuan per unit of content, while this year some prices have dropped to 46–47 yuan per unit of content. Some companies in the Suihua area are offering even lower prices. Based on past trends, March is the peak season for preparing fertilizers for spring plowing, with demand set to rise significantly. Moreover, not much fertilizer was stockpiled by end-users during this winter’s storage period. So why has there been such a sharp drop in prices despite the strong demand in the Northeast market? The market conditions are indeed a bit strange. However, those who have been closely following the trends on China Fertilizer Network should not be surprised by this situation. The prices of nitrogen, phosphorus, and potassium raw materials have remained low for a long time; in particular, the large fluctuations in urea prices have had a significant impact on the willingness of downstream users to stock up on fertilizers. Coupled with the long-standing trend of price increases during off-seasons and price drops during peak seasons, most fertilizer industry players prefer to wait until there is actual demand before purchasing large quantities of goods. As a result, over the past three to four months since the Spring Festival, many large compound fertilizer manufacturers have seen an accumulation of inventory, slow capital turnover, and an urgent need to clear their stockpiles. This has forced some companies to lower their prices reluctantly. However, slight reductions of 30–50 yuan per ton are no longer sufficient to meet the expectations of downstream customers, which explains why there are instances of significant price cuts aimed at attracting buyers. Additionally, the main raw materials for blended fertilizers are urea, diammonium phosphate, and potassium chloride; recently, the price of diammonium phosphate has continued to drop, with the delivery price of 64% diammonium phosphate from the Bayuquan port in the Northeast region falling to 2820 yuan per ton ； The volume of potassium chloride arriving at ports has increased; the pick-up price for 60% red-powder potassium chloride in port areas has dropped to 2300–2400 yuan per ton. With weak support from raw material costs and buyers holding a strong position in the market, reducing prices becomes the preferred strategy if one wants to secure a share in the spring plowing market in the Northeast. It must be said that the fertilizer market in the Northeast region has been quite surprising recently, and this indicates that price wars over compound fertilizers will become even more intense in 2019. With a major factory in Hubei province taking the lead in these price battles, it is inevitable that some companies will suffer losses and gradually withdraw from the market. A new round of silent wars is underway, and we will have to wait and see what happens. (Yang Xiaomei)