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Things related to Yian after the conference… Author/Source: China Fertilizer Network Date: 11-21-2019 Clicks: 37 The annual phosphorus compound fertilizer conference has come to an end. The crowd gathered in front of the venue does not reflect the enthusiastic atmosphere that characterized the entire conference. It is understood that fewer people attended this year’s exhibition compared to previous years; it seems that the conference did not create a positive atmosphere, and it can be considered more of a gathering for those working in the phosphorus compound fertilizer industry. So, after returning from the conference, what information did I learn about monoammonium from industry insiders? I. The weak market conditions persist, with no signs of an improvement in demand. Upon returning from the conference, industry professionals who attended it said that the market for ammonium nitrate remained sluggish after the meeting; no large-scale orders were reported to have been placed. It is understood that some large manufacturers of compound fertilizers have gradually increased their stock of ammonium nitrate over the past period, and they are all able to offer price guarantees, usually valid until around the end of December. It is also reported that a few ammonium nitrate manufacturers are already able to arrange price guarantee agreements for next year’s deliveries, indicating that confidence in this product within the industry remains low. Although there is an expectation that the overall operating rate of compound fertilizer manufacturers will increase, no significant rise has been seen in the short term. Moreover, it has been reported recently that environmental inspections have intensified in areas such as Lianghe in Shandong due to factors like heating, which may affect the pace of improvement in the operating rates of compound fertilizer manufacturers in the future. Although compound fertilizer manufacturers still have a certain demand for raw materials for winter storage, there is unlikely to be any concentrated or large-scale purchases of monoammonium nitrogen in the short term. II. The decline in prices of raw materials such as sulfur and ore cannot be halted, and costs continue to fall. Since last week, sulfur prices have dropped significantly. Last week and this week, the price of sulfur produced by Puguang dropped by 50 yuan per ton, and by 40 yuan per ton respectively. Currently, the prices at Wanzhou Port and the Dazhou plant are 520 yuan and 470 yuan per ton. In previous years, sulfur prices would see a sharp rise around the time of phosphate fertilizer conferences, but the situation this year is concerning, as there has been no significant consumption of sulfur stocks at ports. At ports such as the Yangtze River Port, the price of granular sulfur has dropped to around 485 yuan per ton, a decrease of 75 yuan compared to the beginning of last week. Earlier on, there were reports of a downward trend in phosphate rock prices, and it has been confirmed recently that there has indeed been a slight decline. It is reported that the price of phosphate rock with a 28% purity at the mine site in Hubei is less than 300 yuan, while the price of rock with a 30% purity has dropped to 350 yuan. Liquid ammonia is also on a downward trend; currently, the prevailing acceptance price at factories in Hubei is only 2,650 yuan, with further declines still possible. It is evident that raw material prices also affect monoammonium phosphate, and the industry believes that there is still room for its price to decline. III. The supply structure has seen slight adjustments. The market situation for monoammonium phosphate is not favorable, and companies face significant sales pressures, especially regarding 55% powdered monoammonium phosphate. Given the large overall production capacity and ample supply of this product, many companies are competing fiercely to secure a share of the demand from various compound fertilizer manufacturers. As a result, low-price policies are frequently implemented. Recently, some companies have switched part of their production to 58% powdered ammonium phosphate in order to reduce their pressures, and they also plan to produce industrial-grade monoammonium phosphate in the future. In recent years, it’s not only compound fertilizer manufacturers that have shifted to the market for new types of fertilizers; monoammonium phosphate producers as well are seeking new avenues. Some of these companies are trying to produce industrial-grade monoammonium phosphate as well as 64% and 66% fully water-soluble powdered forms of this product. Even large manufacturers in Guizhou have given up on producing 55% powdered monoammonium phosphate, as it is not profitable. Transformation is a new approach, but companies should still consider various factors before making a decision. Demand remains limited; so what should companies do when there is also an oversupply of capacity for industrial ammonium? This is a question that everyone should think about deeply. In summary, although there are no positive factors for monoammonium, and the harsh winter conditions might persist until next spring, companies as well as their suppliers and customers should not lose heart. There is always a solution to any problem; one should not dwell in a negative atmosphere, but rather look forward to an improvement in demand for monoammonium in the future. (Zhao Hongye)