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Gathering in Qingdao at the beginning of winter: Yiamu gains prominence _ Author/Source: China Fertilizer Network Date: 2019-11-07 Clicks: 229 The overall fertilizer market has remained sluggish for a long time; the market situation for Yiamu is also not optimistic. There is little confidence in Yiamu within the industry, demand from downstream sectors is weak, and compound fertilizer manufacturers are struggling to survive, so they pay little attention to Yiamu. Traders too are indifferent to the market trends for Yiamu and lack the inclination to take any action. Recently, there have been few new deals for ammonium sulfate. Most companies are willing to offer a minimum price guarantee, with the earliest such guarantee dating back to November 20th. Currently, in Hubei province, the actual price at which 55% pure ammonium sulfate is delivered from factories is around 1800–1850 yuan per ton (the same unit is used throughout). In Shandong, the price upon delivery to warehouses is 1950–2000 yuan per ton, while large manufacturers in Yunnan sell it at 1700 yuan per ton. At the Bayuquan port, the price of 55% pure ammonium sulfate is 1950–1970 yuan per ton. With just a few days left before the start of the phosphorus compound fertilizer conference, although there are no clear signs of improvement in the monoammonium market, some positive factors have begun to emerge. Some industry insiders also hold slight hopes for monoammonium phosphate, believing that the opening of the phosphorus compound fertilizer conference could create a favorable atmosphere for it. I. Downstream demand is expected to increase. Around the time of the annual phosphorus compound fertilizer conferences, the winter storage market for such companies begins to operate. Although the overall production capacity of these companies remains low for now, it is reported that in some areas they have been using up their existing raw material stocks; as a result, there are not many reserves of ammonium phosphate left. While they may make some purchases in the near future, the volume of those purchases will likely be limited. Therefore, compound fertilizer manufacturers will still face a significant shortage of raw materials for winter production. Although purchases of compound fertilizers should be approached with caution given the current overall conditions in the fertilizer market, demand is expected to increase compared to previous periods. II. The overall operating rate of monoammonium has declined. Starting in October, some ammonium nitrate production plants began to undergo maintenance work. By the middle and late part of October, some large factories in Hubei undertook scheduled maintenance on their production facilities while smaller plants stopped operating. In other regions as well, some companies adjusted their production levels according to their own circumstances. As of November 1, the overall operational rate for ammonium nitrate production across the country was only 43.17%, with the operational rate in Hubei, the main production area, at 44.07%. Some companies began maintenance work at the beginning of the month, while others have been in the process of maintenance since mid-to-late last month; production is expected to resume around the middle of the month. Some companies say that whether to resume production depends mainly on the market situation after the meeting regarding phosphate fertilizers – if conditions improve for monoammonium fertilizers, they will consider restarting production. Many industry insiders remain pessimistic about monoammonium, especially some traders who believe that there will be little improvement in its situation in the short term; as a result, they have little intention to take action at present and prefer to wait and observe. They believe that although demand is expected to increase in the future, at present new demand is likely to be scattered and relatively low. The extent of an improvement in demand also depends on factors such as the recovery of production rates at compound fertilizer companies and ammonium phosphate manufacturers, as well as timing. Additionally, given that there is no positive trend in the overall market for raw materials such as sulfur, phosphate rock, and liquid ammonia, there is still a risk of a slight decline in ammonium phosphate prices in the short term, with little possibility of a significant rise. In short, the phosphorus compound fertilizer conference may bring a glimmer of hope for monoammonium phosphate, but the trend in market conditions should ultimately be determined by demand – demand is the key factor, and it is the quality of demand that truly determines the trajectory of monoammonium phosphate prices. (Zhao Hongye)