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Monoammonium Nitrate: Waiting in Silence for Signs of Recovery Author/Source: China Fertilizer Network Date: 2019-10-17 Clicks: 4 Recently, the price of monoammonium nitrate has remained relatively stable, with little further decline; in most cases, a minimum price can be guaranteed. The issue is that there are few new orders, and further price drops may not attract significant orders. As a result, quotes hold little significance. Most companies do not provide quotes after the holidays; some companies initially set high prices but later adjust them downward, resulting in stable prices. Each transaction is negotiated on a case-by-case basis, and a minimum price can be agreed upon. In Hubei region, the actual acceptance price for 55% ammonium carbonate is around 1,850 yuan per ton (the same unit applies hereafter), with a minimum price guarantee in place until the end of the year ； In regions such as Sichuan and Henan, 55% of the ammonium carbonate produced there should actually be sold at 1800 yuan or slightly less per unit ； In the Shandong region, 55% of the ammonium sulfate powder is delivered to warehouses at a price of 2000–2050 yuan per unit ； The price of 55% ammonium phosphate from large manufacturers in Yunnan is 2,030–2,050 yuan per ton, while that in Liaoning is also in this range. Negative factors related to monoammonium dominate. Firstly, the overall operating rate of monoammonium has remained relatively stable, while large manufacturers are under considerable inventory pressure. In recent months, the overall operation rate of monoammonium has remained relatively stable at around 50%, with enterprises in Hubei, the main production region, having an operation rate slightly higher than 50%. Recently, only a few companies have planned maintenance activities, and the scale of these efforts is generally small. A factory in Henan has stopped production temporarily and is expected to resume operations by the end of the month. The ammonium sulfate production units of some companies that ceased operation earlier have also not yet resumed work. Companies in Hubei plan to begin their annual maintenance tasks soon, with completion by the end of the month, while small factories in Yunnan are also set to resume production soon. For the manufacturers of 58% and 60% powdered monoammonium fertilizers, their production scale is generally small, resulting in low overall capacity. Additionally, there was a high demand for high-concentration monoammonium fertilizers as autumn fertilizer needs increased earlier in the year, leading to many orders from these companies; as a result, inventory pressure remains moderate at present. However, 55% of ammonium carbonate manufacturers face considerable inventory pressure, especially the larger producers with high production capacities; otherwise, we would not have heard about lower transaction prices for these large companies in the past. Secondly, demand from downstream markets is sluggish, with purchases being made on a demand-driven basis. Currently, we are in the phase of concluding autumn fertilization efforts and preparing for the winter storage market. The production of compound fertilizers for autumn use has already been largely completed, while the policies regarding winter storage fertilizers remain unclear; most companies have not yet held meetings with their distributors for winter storage purposes. Additionally, the operation rates of companies in key compound fertilizer production areas such as Shandong remain low, so there is little interest in purchasing raw materials at present. It is understood that compound fertilizer manufacturers adopt a demand-driven approach to purchasing ammonium nitrate as raw material; companies in certain areas stock up on ammonium nitrate at lower prices in moderate quantities, while most of them purchase only small amounts, ranging from several hundred tons to a few thousand tons. The slow rate of consumption further reduces demand. Once again, falling raw material prices have weakened cost support. The price of phosphate rock has remained relatively stable over the long term with little variation, but if demand for phosphatic ammonium fertilizer on the downstream side continues to be weak, it will also have a slight impact on the raw phosphate rock. Inventory levels of imported sulfur at ports are high, and demand is weak; even as domestic sulfur prices rise in an attempt to boost market activity, this does not succeed in invigorating the market. Currently, the price of granular sulfur at the Yangtze River ports has dropped to 605 yuan, while at the Puguang Wan Zhou port and Dazhou facilities in China, the prices have once again fallen to 630 yuan and 600 yuan respectively this week. The price of liquid ammonia fluctuates within a narrow range; currently, the standard ex-plant price for liquid ammonia in Hubei is 2850–2870 yuan, with discounts of around 50 yuan available upon transaction. According to rough calculations by Zhongfei Net, the total cost of high-quality 55% ammonium phosphate in Hubei ranges from 1,850 to 1,900 yuan. In summary, negative factors indeed dominate, with few positive ones; the main hope lies in the positive atmosphere generated by the phosphorus compound fertilizer conference. However, many in the industry believe that even if demand improves, it will be difficult to consume the inventory that companies have accumulated earlier, and there remains a risk of price drops for monoammonium phosphate. There is hope that this sector can find new opportunities amidst the current challenges. (Zhao Hongye)