Compound fertilizers remain quiet in August; will fertilizers be popular again in autumn?

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Compound fertilizers remain quiet in August; will fertilizers be popular again in autumn? Author/Source: China Fertilizer Network Date: 2019-08-12 Clicks: 3 July has passed peacefully, and August has arrived quietly. As for the market situation for compound fertilizers, there has been no significant change in its stable state. After completing the first round of payments related to autumn fertilizers, most compound fertilizer manufacturers have started shipping their products. The main areas of shipment remain those north of the Yangtze River and in the Central Plains region. However, compared to early July, the progress of receiving new orders by most compound fertilizer companies is very slow. Urea prices remain stable at low levels, and there is a strong tendency among downstream users to wait and see. So, will autumn fertilizers be able to experience another surge in demand? Firstly, the amount of fertilizer prepared for the first wave of autumn fertilization was insufficient, leaving room for additional demand. At the beginning of July, the first round of payments from companies producing autumn fertilizers was completed. Some companies that offered premium-quality compound fertilizers managed to collect their payments fairly well, but this did not cover all cases. As for those companies that set normal prices for autumn fertilizers, their payment collection performance was rather average. According to research conducted by China Fertilizer Network, there is a shortage of autumn fertilizers in certain areas of Central China; some distributors have not yet started preparing for this season’s needs. Given the instability in the fertilizer market recently, many are opting to wait and see before taking action. Therefore, there is still some demand for autumn fertilizers left in the period at the end of August and beginning of September. Secondly, environmental protection measures are being tightened step by step, so compound fertilizer manufacturers do not face much inventory pressure. Recently, environmental inspections have been strict in regions such as Shandong and the Two Rivers areas, which has restricted the operation of many compound fertilizer manufacturers. At the same time, there is little demand for shipments in the market. Therefore, in the short term, most of these companies do not face inventory pressures, but they do encounter certain financial difficulties. If environmental inspections continue or become more stringent during the major parade in September, it is possible that there will be a shortage of supply when demand for fertilizer rises again in the autumn. Once again, there are expectations regarding urea futures, but there are still many uncertainties in the future. Urea futures are about to be launched, and it’s difficult to predict their impact in the long term. After all, the scale of trading in urea is quite large. If it’s possible to stabilize urea prices or drive them up, it could bring some hope for the fertilizer market during the autumn planting season or for winter storage. Additionally, the second half of each year and winter are periods with the strictest environmental regulations, resulting in restrictions on production. The combination of these various factors might create an opportunity for a boost in demand for fertilizers during the autumn planting season. In short, everything is ready except for the final push; all expectations will come true only when various conditions are met. In recent years, the fertilizer market has been highly volatile, and competition in the field of compound fertilizers has become increasingly fierce. By keeping an eye on the market information provided by China Fertilizer Network, it is possible to gain some clarity amidst this chaotic market situation. (Yang Xiaomei)