Environmental protection agencies carry out thorough inspections, while compound fertilizers slip through unnoticed

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Environmental protection agencies carry out intensive inspections, while compound fertilizers slip through unnoticed. Author/Source: China Fertilizer Network Date: 2019-08-05 Clicks: 20 It was a hot day in August. Recently, temperatures across the country have continuously reached record highs, and flood disasters have been significantly more frequent than in previous years. Relatively calm is the fertilizer market, which seems to be in a stalemate; after the first round of payments for autumn fertilizers was completed, prices have since continued to decline. At present, most prepayment policies for compound fertilizers are based on interest calculation and minimum guarantees; downstream customers are unimpressed, companies are at a loss, and the overall market is in a weak state. It is certain that the price of compound fertilizers has remained relatively stable over the past few weeks, with no significant factors driving either price increases or decreases. However, it has been reported recently that a few companies are taking advantage of the momentum surrounding \"environmental inspections\" to demand price hikes. If such increases can help stabilize the market, they will not only relieve the pressure on these companies to sell their products but also boost demand from downstream sectors, thereby reducing the risk of market stagnation. Otherwise, the only option left for compound fertilizers will be price cuts and promotional offers. Firstly, raw material prices are generally low. Recently, not only is the compound fertilizer market a source of concern, but there are also no many positives when it comes to raw materials. With the rise in demand for printing inks, the domestic urea market has also been forced to experience a decline in prices. Currently, prices in the main production areas have dropped to some extent compared to earlier levels. Given the weak agricultural demand and poor industrial demand as well, the outlook for this market is not positive in the coming period ； Even before the autumn fertilizer market opened, the so-called popular fertilizer type, monoammonium phosphate, showed signs of price increases. However, contrary to expectations, the companies’ attempts to raise prices were not very effective, and prices remained relatively stable for now ； As of now, the inventory of potassium chloride at ports is around 3 million tons, and demand remains moderate; the future trend can be inferred from this. Secondly, there is insufficient demand downstream. In addition to the weak raw material market conditions that result in insufficient support for the prices of compound fertilizers, current demand from end-users is also a negative factor. After the initial period of purchasing at low prices, end-users have become more cautious; whether it comes to interest calculations or guaranteed prices, distributors are proceeding with caution. One reason for this is the lingering mindset of \"price increases during off-peak seasons\" and \"price drops during peak seasons.\" Such phenomena have occurred frequently in the past, undermining distributors’ confidence in stocking up goods. Compared to making advance payments, purchasing as needed is a safer approach ； The second reason is the abnormal climate this summer, with frequent droughts and floods that have, to some extent, disrupted the normal progress of agricultural production and daily life; this has also led to a relative decline in enthusiasm for preparing for farming in the downstream areas. Finally, put an end to one-size-fits-all approaches in environmental protection. From July 10 to July 15, in less than a week, all 8 inspection teams of the first batch of the second round of central ecological and environmental inspections arrived at their assigned locations. With the resurgence of the \"environmental protection\" trend, business operations in certain areas will face moderate restrictions, but it certainly won’t be a case of \"one-size-fits-all\" approaches. In the work of central ecological and environmental protection inspections, a one-size-fits-all approach to ecological and environmental protection is strictly prohibited. It is forbidden to resort to simplistic and harsh measures such as immediate suspension of operations in order to cope with the inspections, without considering the specific circumstances; likewise, perfunctory responses such as shutting everything down outright or suspending operations first and then deciding what to do next are also prohibited. In summary, as of this weekend, the overall operating rate of large-scale compound fertilizer manufacturers across the country is around 43%, a 4% decrease compared to the previous week. Apart from the impact of environmental regulations, weather conditions and demand from downstream industries are the main factors at play; it is expected that the compound fertilizer market will remain in a state of weak stability in the short term. (Feng Hongyang)