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Singles’ Day tear-jerking sale: Compound fertilizer 1? 00 Author/Source: China Fertilizer Network Date: November 11, 2019 Click-through rate: 119 In the blink of an eye, “Singles’ Day” has once again made its grand entrance. When it comes to “Singles’ Day”, what first comes to people’s minds are inevitably “discounts and promotions”. Indeed, prices of various goods see varying degrees of reduction compared to normal times. What’s different this year is that the current downward trend in fertilizer market prices seems to coincide with the arrival of “Singles’ Day”. With massive promotional sales taking place, all types of fertilizers are now being sold at unprecedentedly low prices. However, it is worth mentioning the compound fertilizer market. Reportedly, in current winter storage quotations, the price of 45% chlorine-based general-purpose products mostly stands at 1,900 yuan per ton or lower; in some regions, the quote for 45% sulfur-based fertilizer (12-18-15) has even dropped below 2,000 yuan per ton. The price reductions for both types of fertilizers compared to last year are nearly 300 yuan per ton. At such low prices, while facing pressure themselves, enterprises also left distributors at a loss; as a result, the winter stockpiling market fell into a stalemate for a time. First, the price of alternatives is too low. When it comes to alternatives to compound fertilizers, diammonium phosphate comes to mind first. Although the price of compound fertilizers has dropped significantly, this drop is far less than that of diammonium phosphate. In major production areas such as Hubei, the settlement price for 64% diammonium phosphate at ports in the Northeast ranges from 2400 to 2500 yuan per ton, representing an unprecedented decline in prices compared to previous years. The sharp drop in DAP prices has inevitably affected the compound fertilizer market, while also undermining downstream players’ confidence in stockpiling. Recently, there have been increasing calls in the market to compare compound fertilizers with diammonium fertilizers, with the term \"cost-performance ratio\" coming up frequently. Diammonium fertilizers hold an advantage over compound fertilizers in terms of cost-performance, to the point that some people even decide to abandon the use of compound fertilizers altogether. Secondly, there is insufficient support from raw material costs. The reason behind the continuous decline in the price of compound fertilizers is, fundamentally, the insufficient support from their raw material costs. So far, the pure raw material costs for 45% chlorine-based/sulfur-based general-purpose products stand at 1,615 yuan per ton and 1,885 yuan per ton respectively. These figures have decreased by 200 yuan per ton since the beginning of the autumn fertilizer season. Nevertheless, there remains a risk of further declines in the future. Among them, urea is the most concerning. Insufficient domestic demand and a unfavorable international environment—coupled with a series of negative factors—have dashed any chances of a short-term rebound ； The market sentiment for monoammonium phosphate remains largely downbeat; the peak autumn demand season failed to bring about a desired recovery, and the market continues to trend weakly ； Inventory levels of potassium chloride in ports are at an all-time high; until these stocks are reduced to safe levels, weakness is inevitable. Finally, downstream demand is far from promising. Apart from raw material costs driving the prices of compound fertilizers, downstream demand conditions are also crucial. Since the start of the spring market, demand for compound fertilizers has remained weak overall. Even during the peak seasons, there has not been the same level of activity as in previous years. One reason for this is the insufficient purchasing power on the part of end-users, along with poor agricultural yields, which directly affects their willingness to invest in preparations for farming. This leads to a lag in market activity ； The second reason is that this year, the Lunar New Year fell earlier than usual. In some regions, such as the Northeast, there is still some time between the end of the holiday period and the peak season for fertilizer sales, which gives distributors ample opportunity to make their moves. Therefore, choosing to wait at the right time is the best way to avoid risks. In summary, given the extremely poor market conditions for diammonium fertilizers, falling raw material costs, and a lack of demand from end-users, the large-scale promotions of compound fertilizers during \"Double 11\" are not a result of companies acting on impulse but rather a necessary measure. Many reports suggest that winter stockpiling levels may become clearer around the time of the phosphorus-based compound fertilizer meetings, yet there are still not enough positive factors.