Yi’an is on a downward trend

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Ammonium nitrate is on a downward trend. Author/Source: China Fertilizer Network. Date: 2019-08-20. Clicks: 40. The market situation for ammonium nitrate has not been favorable recently; new orders are being closed poorly and prices are falling. Currently, the standard ex-factory price for 55% powdered ammonium nitrate in Hubei is around 2050 yuan per ton. Some companies do not have fixed prices and settle deals on a case-by-case basis. In fact, large manufacturers in Hubei offer 55% powdered ammonium nitrate at around 2000 yuan per ton, while some lower-quality products are sold at around 1950 yuan per ton. The price of 55% ammonium sulfate from large manufacturers in Sichuan remains around 1,950 yuan, but it is reported that the supply available to traders has dropped to 1,900 yuan or less. The pricing of monoammonium phosphate by enterprises in Henan remains stable for now, with prices determined on a case-by-case basis; it is reported that the actual export price of 55% powdered monoammonium phosphate has dropped to 1950–2000 yuan. It can be seen that the prices have dropped by 20–50 yuan compared to previous periods; the price of monoammonium is indeed on a downward trend. Is there still a possibility of further declines? Compound fertilizer manufacturers themselves have low production levels, resulting in slow consumption of raw material inventory. As of this Friday, the operating rate of the compound fertilizer industry was only 49.37%. It is understood that compound fertilizer manufacturers in regions such as Shandong, Henan, Hebei, and Shanxi are operating at low levels, mainly due to environmental and safety inspections that have led to overall reduced production; some small fertilizer companies have even stopped operations. With the National Day approaching, it is expected that the overall operating rate for compound fertilizers in September will also remain low. Furthermore, environmental and safety inspections not only affect corporate production but also impact shipping operations; moreover, road construction in some provinces and cities has caused varying degrees of disruption to fertilizer transportation. As a result, composite fertilizer companies still have large overall inventories; shipments are hindered, production capacity is insufficient, and thus the consumption of raw material inventories is slow. It is understood that large composite fertilizer manufacturers in regions such as Shandong and Henan have sufficient stocks of ammonium nitrate to sustain production until mid- to late September; therefore, these companies have low plans for new purchases, and there is little activity in terms of procurement. Apart from the compound fertilizer manufacturers, downstream traders still have surplus stock that has not yet found a destination, and there is no intention to purchase at reduced prices at the moment. Recently, traders have also been facing difficulties. Some of them still have surplus amounts of monoammonium phosphate that they purchased earlier, with no outlet for it. The factories are urging them to pick up the goods as soon as possible, and under pressure, traders may be forced to sell their inventory at low prices. It has been learned recently that 55% of the monoammonium phosphate supplied by large manufacturers is being delivered to Hunan at just 2055 yuan; when converted to cash terms at the factory, the price is only 1955–1960 yuan. Some traders say they might buy at lower prices in the future, but the time has not yet come; they will consider making purchases only when the price of 55% ammonium sulfate produced by the large factories in Hubei drops to around 1900 yuan per ton. The inventory pressure on Yianmu enterprises is gradually increasing. At present, there are very few shipments pending for ammonium sulfate producers, new orders are not performing well, and there is also a portion of inventory that has no designated destination. As a result, the inventory pressure on these producers is increasing gradually, especially for those that produce 55% powdered ammonium sulfate, whose inventory pressure is particularly high. The support from raw material costs is insufficient. Over the past two months, the inventory levels at Sulfur Port have remained above 2 million tons; as of this Friday, the total inventory there was around 2.3 million tons. With the US dollar rate remaining high at present, both buyers and sellers at the port have adopted a wait-and-see attitude, resulting in few new deals being struck and continued declines in sulfur prices. Currently, the price of granular sulfur at the Yangtze River Port and Fangcheng Port has dropped to around 760 yuan per ton, and there is still a tendency for further declines. This situation has also led to a lack of confidence among industry players regarding ammonium sulfate. In summary, there are too many negative factors affecting monoammonium, and no improvement in demand is expected at present; therefore, prices of monoammonium are likely to continue to fall in the short term, by around 50 units. (Zhao Hongye)