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Late in autumn – is it wishful thinking to expect compound fertilizers to maintain high prices? Author/Source: China Fertilizer Network Date: 2019-09-25 Clicks: 5 By mid-to-late September, most of the autumn fertilizers have been delivered; in some areas, shipment has already begun, and certain distributors have switched to selling autumn fertilizers. The pace at which these products reach the market is relatively slow. So, in the later stage of the demand for fertilizers for the autumn season, will compound fertilizers be able to maintain their prices? First, how much fertilizer is still needed for autumn? This year, compound fertilizer companies started preparing autumn fertilizers earlier than usual; as early as the beginning of July, some of them began to announce provisional export prices for wheat fertilizers. It has been over 2 months now, and planting in areas where wheat fertilizers are used will start after October. Despite this time spent preparing the fertilizers, the amount of fertilizers prepared for the autumn season is still less than in previous years. The sales volume of autumn fertilizers for most compound fertilizer companies has decreased, mainly due to low grain prices and a lack of enthusiasm for preparing fertilizers in advance. Therefore, there should still be a small demand for replenishing stocks in late September and early October, but the volume is likely to be very small. Secondly, raw material prices keep falling, weakening the cost base for compound fertilizers. Recently, the prices of raw materials used in compound fertilizers have also been fluctuating constantly, with urea prices particularly unstable and making it difficult to discern a clear trend. Although India has issued new tenders recently, both in terms of price and volume, these tenders have had little impact on raising domestic urea prices; in fact, urea prices in some areas have continued to decline slightly ； The prices of monoammonium and diammonium phosphates are also continuing to fall. This autumn is not favorable for phosphate fertilizers, with prices dropping continuously while demand remains low ； It is even more difficult to sustain prices for potassium fertilizers, as there is a large volume of goods available at ports that need to be processed. Potassium sulfate, on the other hand, remains stable in price. Therefore, considering raw material costs, it is hard to maintain prices for compound fertilizers; the high prices observed earlier were due to a situation of forced stability. Once again, as National Day approaches, to what extent will the start of production of compound fertilizers be affected? The issue of restricted operations has attracted a lot of attention since August; news of production cuts and shutdowns kept coming in one after another. Recently, inspections related to environmental protection and safety checks have been carried out in various places, with most of these inspections targeting chemical manufacturing enterprises. For now, there does not seem to be much impact on the operations of fertilizer manufacturers. It is expected that the operation rates of compound fertilizer companies will not drop significantly during the National Day holiday. At present, the operation rate of most large compound fertilizer companies is around 52%, while some smaller, non-compliant enterprises remain shut down. In summary, it is somewhat wishful thinking to assume that the prices of compound fertilizers will remain stable; however, the high costs of raw materials were fixed earlier on, and the orders placed earlier are now being delivered. Although the prices of raw materials continue to fall, since the fertilizers for autumn will be available towards the end of autumn, price changes have little significance. What matters going forward is the trend in prices for winter storage. (Yang Xiaomei)