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The Same Winter Stockpiling, Different Ammonium Diammonium Prices Author/Source: China Fertilizer Network Date: 2019-09-29 Clicks: 6 In the same period last year, the average delivery price of ammonium diammonium in North China was 2,800 yuan per ton; in Heilongjiang Province, the estimated pre-payment price at delivery was between 3,000 and 3,050 yuan per ton. Throughout last year, the overall price of ammonium diammonium remained high, and supply was relatively tight, with shortages occurring in some areas. By the end of September this year, however, the overall price of ammonium diammonium had dropped. Currently, low prices are common in North China, with some companies in Hubei reporting delivery prices as low as 2,400 yuan per ton. Downstream traders are concerned about further price drops and thus tend to adopt a bearish attitude. In some areas, sales are even being made at prices lower than the cost of production. Although the winter stockpiling season has not yet reached its peak, payments started to be made during the same period last year. Although the amount of money invested in purchases from regions such as the Northeast and Northwest is not very large, there is still a certain level of interest in making purchases. At present, however, business representatives from companies have been in the Northeast for a month, and the overall situation regarding payments remains poor. The estimated pre-payment price for 64% ammonium diammonium in Heilongjiang Province is only 2,600 yuan per ton, or slightly less, which represents a decrease of 400 yuan compared to the same period last year. The main reasons for this are as follows: First, the prices of raw materials have dropped significantly. During the same period last year, the price of sulfur remained above 1,150 yuan. At present, due to high inventory levels, the overall price of sulfur is around 700 yuan; moreover, the hundreds of thousands of tons in stock at ports further prevent any increase in sulfur prices in the near future ； Last year at the same time, the price of liquid ammonia was around 3,300 yuan per ton when it entered the market; this year, however, the price of liquid ammonia in the market has remained low. Taking into account all these raw material costs, the cost of raw materials for diammonium phosphate has decreased by about 300 yuan compared to last year. Therefore, the decline in the price of diammonium phosphate this year is not unfounded. Secondly, enterprise production remains at a high level for the time being, while the overall environment for fertilizers is deteriorating. As environmental protection and safety become increasingly standard practices, the environmental standards for fertilizer manufacturers are gradually being met. Roughly speaking, the average daily production of urea exceeds 150,000 tons, while the operating rate of large-scale compound fertilizer manufacturers has also risen to over 50%. Some diammonium phosphate manufacturers have not yet carried out any major maintenance work to date. The overall supply in the market is high, and the resulting supply pressure is becoming more apparent. The price of urea has dropped by more than 200 yuan compared to the same period last year. Buyers are adopting a wait-and-see attitude, expecting prices to rise rather than fall. Diammonium phosphate manufacturers, facing difficulties in sales, are competing on price. Sales are sluggish in North China, while distributors in Northeast China are waiting for further clarification regarding policies related to diammonium phosphate. Finally, international prices declined. Although the volume of diammonium phosphate exports this year is similar to that of the same period last year, the overall price level has dropped significantly. With domestic sales facing difficulties, diammonium phosphate manufacturers hope to alleviate their supply pressures through the international market. However, due to continuous price declines in the international market, the current offshore reference price for 64% diammonium phosphate in China is between $310 and $315. Even considering the depreciation of the RMB, the actual price upon arrival in China remains below 2,200 yuan. At such prices, very few companies are able to export without incurring losses. In summary, at the current stage, the autumn market is in a peak period for purchases in local markets; the period for companies to supply large quantities of goods for the autumn market has passed. The development of the winter storage market is relatively slow, and it is expected that the recommended prices for diammonium phosphate in the northeastern region will continue to decline. (Wu Wenchao)