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Scarcity of favorable conditions – what’s the future for monoammonium? Author/Source: China Fertilizer Network Date: 2019-07-30 Clicks: 65 The market for monoammonium nitrate has been relatively quiet in recent weeks, with prices remaining stable for now. In Hubei province, the standard ex-factory price for 55% powdered monoammonium nitrate is still around 2050 yuan per ton. Some large producers of this product have not yet set new prices; deals are negotiated on a case-by-case basis. The price for 55% powdered monoammonium nitrate delivered in Shandong is around 2150 yuan, while the price for 58% powdered monoammonium nitrate delivered in Shandong ranges from 2310 to 2320 yuan; lower quality products may be available at around 2300 yuan ； In Sichuan, the actual outlet price of 55% ammonium sulfate produced by large manufacturers ranges from 1,900 to 1,950 yuan; lower prices are associated with transactions that took place earlier, while there are currently fewer transactions at higher prices ； The ex-factory price of 55% powdered ammonium nitrate produced by enterprises in Henan is generally around 2,050 yuan, with the actual price at export being around 2,000 yuan or slightly higher. Although some industry insiders believe there is a possibility of an increase in the price of monoammonium phosphate in the future, at present there are not many positive factors; on the contrary, there are more negative factors, which has led to a decline in confidence among enterprises, as well as downstream compound fertilizer manufacturers and traders. So what are the positive and negative factors affecting monoammonium in the near term? Negative factors: 1. The first round of payments for autumn compound fertilizers is nearing completion, while prepayments for new orders remain stagnant. It is understood that large distributors across the country made upfront payments to purchase some of the best-selling compound fertilizers, with plans to pick up these products in August. Payments for wheat fertilizers for the autumn season have not been as satisfactory as expected, and there is less interest in the price policies for autumn compound fertilizers than anticipated. At present, the first round of payments for autumn compound fertilizers has been completed, while negotiations regarding advance payments for new orders are still ongoing. II. The remaining rigid demands are not yet apparent. It is understood that compound fertilizer manufacturers in regions such as Shandong have a low operating rate due to environmental and safety inspections; currently, the overall operation rate in the compound fertilizer industry remains around 50%. In the early stage, large compound fertilizer manufacturers across the country purchased an appropriate amount of ammonium monoamide, a raw material needed for autumn production. Recently, purchasing activity has slowed down; although some companies still have certain demand in the future, they are not in a hurry to make purchases at the moment. It is reported that some compound fertilizer manufacturers have large inventories of both finished products and raw materials, leaving them with insufficient capacity to purchase additional raw materials. Some compound fertilizer manufacturers have lost confidence in ammonium monohydroxide as a raw material, so they are opting to wait and observe for now. III. Raw material costs are low, providing limited support. In recent months, the price of raw sulfur has continued to decline. There was a slight upward trend last week, but due to factors such as weakening prices in the US dollar market and high inventory levels in ports, most industry players lack confidence in sulfur prices, leading to further declines. Currently, the price of granular sulfur at ports such as the Yangtze River Port and Fangchenggang Port has dropped to 800 yuan or even lower. Additionally, as domestic sulfur prices also continue to fall, the overall trend for sulfur prices remains downward. At present, the sulfur prices at the Puguang Wanzhou Port and Dazhou plant have fallen to 860 yuan and 820 yuan respectively. Positive factors: The positive factor considered by the industry is the consistently low overall operating rate of ammonium nitrate. If there is centralized purchasing by downstream users in the future, it could lead to a slight shortage in supply, giving ammonium nitrate an opportunity to see price increases. However, this year’s situation is different from previous years; whether centralized purchasing will occur depends on the overall market conditions for compound fertilizers as well as the timing of purchases. In summary, there are many negative factors affecting ammonium nitrate in the short term; some industry players no longer have confidence in this product. Companies in key production areas such as Hubei are maintaining relatively stable pricing, but it is difficult to secure sales at these high prices at present. It is likely that the price of ammonium nitrate will decline, with the future trend depending on overall demand for this product after August. (Zhao Hongye)