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Ammonium chloride “starvation therapy”: Any hope for an increase in the price of compound fertilizers? Author/Source: China Fertilizer Network Date: 2019-08-12 Clicks: 30 The so-called hunger therapy falls under the category of dietary therapy. In cases of children accidentally eating too much, medication may not be necessary; just skipping a couple of meals will do ； Patients with acute gastroenteritis should also avoid eating, as it helps facilitate recovery through medication treatment. For mild cases, fasting alone, that is, starvation therapy, can be used and often proves effective. Given the recent weak demand for fertilizers, has the \"starvation tactic\" adopted by some companies proven effective? Firstly, ammonium chloride manufacturers are clearly employing a \"starvation tactic\" – currently, both the raw materials urea and phosphate fertilizers are seeing declining prices. In recent months, the price of ammonium chloride has been envied by many other types of fertilizers; the market is showing positive trends with prices remaining stable at high levels. However, a few companies are offering slightly higher prices for their products, and supply remains tight in certain areas. Some companies are restricting orders or even suspending them for the time being. The main reason for the favorable market conditions is the fluctuating production levels of ammonium chloride manufacturers: once the market becomes slightly saturated, some companies in Hubei and Tianjin immediately reduce their production volume. Additionally, strict environmental regulations in Shandong and the two river regions have led to reduced production, and there are plans for further cuts in production volumes in the future. As a result, ammonium chloride will likely maintain high prices in the short term. Secondly, the prices of chlorine-based compound fertilizers in Jiangsu region remain relatively firm. As is well known, compound fertilizer manufacturers in Jiangsu Province use ammonium chloride to produce 45% chlorine-based general-purpose compound fertilizers. The current average selling price at the factory is around 1,910–2030 yuan per ton. Although some compound fertilizer manufacturers outside the province offer products at lower prices, the price of this type of fertilizer in Jiangsu remains relatively stable. The main reason for this is that the price of ammonium chloride, the raw material used, remains fairly high and supply is limited. Therefore, it is likely that the average selling price of this product will remain stable in the short term, with no significant drop in prices expected. Once again, environmental protection measures are being tightened, and an increase in the price of compound fertilizers in the future is also possible. Recently, the operating rates of compound fertilizer manufacturers in Shandong and the Two Rivers regions have declined significantly, dropping by 4 percentage points compared to last week. Apart from some factors related to high temperatures, the main reason is the increased scrutiny regarding environmental protection and safety inspections, with such measures coming one after another. The resulting production cuts are likely to become more severe in the future. If demand increases on a large scale while supply remains tight in certain areas, it is possible that the prices of low-end 45% chlorine-based general-purpose products might see a slight rise. However, this would require a combination of favorable conditions, as the production scope for such general-purpose products is quite broad. Finally, more than half of the preparation process for autumn fertilizers has been completed, with raw material prices fluctuating up and down. During this period, any changes in the prices of compound fertilizers can affect those in the downstream industries; therefore, maintaining price stability remains the main task for most compound fertilizer manufacturers at present. (Yang Xiaomei)