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The first snow has fallen; when will I get the diammonium fertilizer? Author/Source: China Fertilizer Network Date: 2019-11-11 Clicks: 119 Recently, the first snowfall has arrived in many areas in the north, yet the price of diammonium phosphate has not improved as it usually does in such situations; prices continue to decline across various regions. Most downstream distributors have become accustomed to the constant downward trend in prices, and thus lack enthusiasm for purchasing goods. Taking the Northeast region as an example, at some large manufacturers, the purchase price of 64% diammonium phosphate at the local levels in Heilongjiang is 2,480 yuan per ton; the price for picking up the product directly at the port for 57% diammonium phosphate has also dropped to around 2,000 yuan per ton. Yet, companies still face difficulties in collecting payments. Such a lukewarm market is truly frustrating; so when exactly will the diammonium fertilizer be available? In recent years, the winter storage market has become increasingly sluggish, with the start of the low-demand market for diammonium phosphate this year being particularly slow. Due to the unsatisfactory export FOB prices and autumn settlement prices, the initial quotes for this year’s winter stockpiling are much lower than those from last year. These prices have continued to drop over time; currently, the price for 64% diammonium phosphate available for pickup at the Bayuquan port is around 2300 only. As prices keep falling, downstream distributors become less confident about purchasing such products, especially since in recent years there has been a tendency of price increases during off-peak seasons and price cuts during peak seasons. Some large traders have begun selling the leftover stock from last year in order to raise funds; the delivery price of 64% diammonium phosphate in regions such as Heilongjiang and Jilin is only 2,000–2,100 yuan, which further exacerbates the already poor market conditions. A combination of various unfavorable factors has led to the current stagnant situation in the winter storage market. However, a conference on phosphate fertilizers is set to be held in Qingdao in a few days, and both manufacturers and downstream distributors are hoping that this conference will bring some positive changes to the winter storage market and break this deadlock. I. The overall environment of the fertilizer market is set to improve. At present, the overall production capacity of compound fertilizers is still less than 40%. Following the meeting on phosphate-based compound fertilizers, in order to capture the winter storage market, the overall production level of these companies is set to increase, which in turn will affect the prices in their raw material markets. Some urea manufacturers facing rising costs and supply issues are set to suspend production or reduce output. However, with lower production levels, the gradual increase in demand from downstream industries, and the support of favorable pricing trends, urea prices have managed to stop their decline that has persisted since October. II. As the demand approaches, winter storage policies are set to be introduced. The importance of the phosphorus compound fertilizer conference lies not only in the gathering of a large number of manufacturers and downstream distributors, but also in the fact that it is held at this crucial time when winter storage begins. The winter storage market is currently at a standstill, but factories need to start producing and transporting winter storage fertilizer, and will have to do so in the middle to late part of November. Major diammonium phosphate manufacturers will also, as the market situation becomes clearer, introduce specific winter storage policies around the time of phosphorus-based fertilizer conferences, thereby providing reassurance to downstream distributors. Overall, during the period around the phosphorus fertilizer conference, diammonium nitrogen will experience some favorable conditions, but whether to make large-scale purchases for winter storage still depends on the overall supply and demand situation as well as the specific winter storage policies of various manufacturers. (Rong Guangwen)