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Ammonium chloride: Demand is minimal, leading to repeated rejections Author/Source: China Fertilizer Network Date: June 10, 2019 Clicks: 19 From 5 p.m. until the early days of June, the market for ammonium chloride in China remained in a state of weakness; new orders from manufacturers across different regions were few, and the statements made by these manufacturers all reflected a pessimistic attitude； The orders pending fulfillment by various companies are on the verge of being completed, making it difficult to handle new orders. The overall industry utilization rate is as high as 76.5%. Although inventory levels in factories are not currently very high, new inventory is gradually accumulating due to a lack of new orders and excessive workload for these companies ； During the traditional off-season, it is inevitable that new orders for ammonium chloride arrive slowly and in limited quantities; as a result, shipping pressures increase. Supplies of ammonium chloride, whether at high or low prices, are repeatedly rejected, forcing companies to make concessions on price. Ammonium chloride prices continue to fall in various markets, and anxiety among industry players is growing. Ammonium chloride prices have seen varying degrees of decline in different regions, whether through explicit reductions or subtle drops; however, factories do not adjust prices once and for all, but instead adopt a gradual downward trend ； Currently, the mainstream ex-plant price for dry ammonium in North China is around 650 yuan per ton. The shortage of wet ammonium in East China has eased, and some companies have reduced their prices; the current mainstream ex-plant price ranges from 520 to 600 yuan per ton, while that for dry ammonium is between 700 and 750 yuan per ton. The arrival price of dry ammonium in the areas along the rivers is also around 700 to 720 yuan per ton. Transactions are not very active and prices can be negotiated further. For detailed prices in other regions, please visit the member area of China Fertilizer Network. To the relief of the industry, manufacturers have not introduced any \"catastrophic\" minimum prepayment policies; the strategy is to sell in large quantities at low prices. So, is there still a chance for ammonium chloride to do well this summer? As the saying goes, \"when all the bad news is priced in, it turns into good news.\" There are still some subtle positive factors in the ammonium chloride market. If it is said that ammonium chloride lacks significant support, that is indeed the case. On one hand, it relies on the support provided by urea; the upward trend in urea prices came to an end, and prices even dropped at that point. However, compared to ammonium chloride, urea prices remain high, which constitutes a form of support for ammonium chloride ； Secondly, a large ammonium chloride plant in Sichuan is undergoing temporary maintenance, and another large plant in Jiangsu is also about to undergo maintenance; as a result, the shipping pressure on surrounding enterprises has eased slightly. This might be the last straw for these enterprises, or it could simply be the only factor that drives market activity. There are numerous negative factors, and manufacturers hold a pessimistic outlook. On the one hand, there is an oversupply of ammonium chloride supplies, with over 70% of production facilities in operation. Additionally, aside from maintenance work at a few large factories in June, no other factories have any planned maintenance, and some companies are even operating at full capacity ； On the other hand, demand was weak, causing the overall operational rate of compound fertilizer manufacturers to drop to around 45.11%; this also led to low operational rates for companies that produce granular ammonium chloride, as a result of which purchases of ammonium chloride decreased significantly ； Finally, there is the cautious wait-and-see attitude among traders: they prefer to buy when prices rise rather than when they fall, and refrain from making moves until the right time arrives. Overall, ammonium chloride manufacturers are operating at high capacity levels, resulting in an oversupply that is difficult to reduce, while with weak demand, the selling pressure on these manufacturers will gradually increase. Negative factors are dominating the current market, and manufacturers are temporarily unable to counteract them; to prevent their products from being rejected, prices are likely to fall further. (Tan Junying)