2,060 yuan – Low prices for winter storage again; compound fertilizers are simply too expensive

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2,060 yuan – Low prices for winter storage appear again; compound fertilizers are too expensive. Author/Source: China Fertilizer Network. Date: 2019-09-29. Clicks: 6. At the end of September, as the market for autumn-use compound fertilizers was coming to an end, and before sales had completely ceased, some compound fertilizer manufacturers began to accept orders for winter storage. Not long ago, some companies in the Northeast region offered fixed prices for winter storage orders, accepting certain quantities of orders. Recently, compound fertilizer manufacturers outside the three northeastern provinces also joined in this trend, holding frequent meetings regarding winter storage and offering low prices. In other words, winter hasn’t arrived yet, but the competition has already begun. According to research conducted by China Fertilizer Network, the sales performance of fertilizers this autumn has been unsatisfactory; the sales volume for most companies was lower than that of last year. As the saying goes, if the market situation for autumn fertilizers is poor, it will be difficult for the winter storage market to improve as well. Shortly after the Mid-Autumn Festival, some compound fertilizer manufacturers could no longer wait and held meetings on winter storage strategies in the Northeast region. Some even offered low-priced products to attract customers to make purchases. The factory price of a 45% sulfur-based fertilizer produced by a company in Henan was around 2,060 yuan per ton, a price that is close to that of chlorine-based general-purpose fertilizers. Such low quotes from large companies outside the province are something I’ve encountered for the first time this year; it’s indeed quite shocking. Although low prices during the winter storage period were expected, such low levels were still beyond my expectations. It is said that the collection of payments has been satisfactory, but for customers in the three northeastern provinces, the shipping costs are high, so the final outcome regarding payment collection remains to be seen. It can be said that the start of winter storage for compound fertilizers this year has been quite difficult. Competition in the winter storage market is set to intensify in the days to come, especially given the ongoing decline in raw material prices – urea prices are falling overall, and the prices of phosphatic and potassic fertilizers are also dropping steadily. In particular, the price of diammonium phosphate is extremely low; currently, the average delivery price for 64% diammonium phosphate in the Northeast region is less than 2,600 yuan per ton. Moreover, the surplus stock from last year has not yet been fully cleared. Under all these pressures, the situation regarding winter storage this year can only be described in three words: \"extremely difficult.\" Given the overall weak economic climate, it is not surprising that the market for fertilizers is sluggish. In recent years, grain prices have either been very low or crops have suffered severe damage, resulting in a shortage of funds at the grassroots level. Under such circumstances, it is inevitable that the consumption of fertilizers declines year by year. Of course, competition also continues to intensify; it is therefore not surprising that a price war in the fertilizer sector has been going on for two or three years now. The only thing that can be done is to be extremely cautious. Fertilizer manufacturers must be very careful when purchasing raw materials, and those who store fertilizers for winter use should also be equally cautious. In summary, the compound fertilizer market has entered a phase of genuine capacity reduction, and industrial upgrading is now an urgent necessity. It is hoped that in the near future, compound fertilizers will be able to overcome their current downturn and reach a more orderly state. (Yang Xiaomei)