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Golden September: Why is the price of diammonium phosphate continuing to drop? Author/Source: China Fertilizer Network Date: 2019-09-11 Clicks: 6. As autumn arrives with clear skies, the sales peak for autumn fertilizers is approaching. Whether the \"Golden September\" that diammonium phosphate manufacturers have been hoping for will actually materialize is the topic of greatest interest in the current fertilizer market. However, reality dealt us a harsh blow: although shipments by enterprises improved in September, the arrival prices of 64% diammonium phosphate in the North China market dropped to as low as 2450–2550 yuan per ton, while the outbound prices for 57% diammonium phosphate in that region were as low as 2100–2250 yuan per ton. Moreover, high-end pricing options are becoming increasingly rare. Due to the continuous decline in prices, some distributors are still waiting to see how things develop, which means that demand in the market will increase slowly in the coming period. Firstly, exports are unfavorable. There is an overcapacity of diammonium fertilizers in the domestic market, and exporters often turn to international markets to alleviate this pressure. However, the international market conditions are poor this year. Although exports from January to July were 298,100 tons higher than in the same period last year, the offshore prices have continued to reach new lows. At present, the offshore price for 64% diammonium phosphate has dropped to $320–325 per ton, with some companies seeing new order prices as low as $315 per ton. The weakness in export prices has left companies lacking the confidence to maintain high prices in the domestic market. Coupled with some companies that have few export orders reducing prices to ease their inventory pressures, it is not surprising that the price of diammonium phosphate has continued to fall. Secondly, there is a lack of maintenance during the off-season. Following past practices, domestic diammonium phosphate manufacturers should carry out equipment maintenance during the off-season in summer. However, this year, aside from a few companies that carried out rotational maintenance of their facilities, most companies did not undertake any major maintenance work. Since the end of the spring planting season, domestic production of diammonium phosphate has remained high. According to statistics from China Fertilizer Network, a total of 9.5472 million tons of diammonium phosphate were produced in China from January to August. Plus, there is a large surplus of inventory in the market this spring ； The inventory of sulfur at the port, which is a key raw material, remains high. Port prices have dropped from over 900 yuan to the current level of 690 yuan. The price of diammonium phosphate in China lacks any positive factors supporting it, and the excess supply has led to a continuous decline in prices even during the peak season. Finally, there is low enthusiasm for purchasing at the downstream end. In recent years, due to the low prices of compound fertilizers, dealers at all levels have seen increasingly lower profits from selling diammonium phosphate; in some areas, they even sell it at a loss by combining it with other products. Dealers tend to wait until the market is about to change before stocking up on diammonium phosphate. Added to this is the high number of natural disasters this year; in particular, the powerful typhoon \"Lekima\" that hit some areas recently caused severe damage to crops. Farmers were already earning little profit due to low food prices, and now the situation has become even worse. Farmers earn low returns from the land, so their enthusiasm for preparing fertilizers is naturally low. In summary, although it is already September, the lack of positive news has forced some diammonium phosphate manufacturers to offer discounts and promotions due to pressure from their own inventory levels. Currently, the low prices of 64% diammonium phosphate in the North China market are approaching the cost levels of some domestic manufacturers with higher production costs. Moreover, with the settlement period approaching, there is little possibility of a significant drop in the prices of diammonium phosphate in the future. (Rong Guangwen)