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1,750 yuan – Has compound fertilizer become a bestseller once again? Author/Source: China Fertilizer Network Date: 2019-12-02 Clicks: 31 At the end of November, the stagnant fertilizer market began to show some signs of improvement, with urea prices experiencing a slight rebound. This increase was mainly observed in Shandong and the Two Rivers regions, with price rises of 20–40 yuan per ton. So, given this rebound in urea prices, could the sluggish compound fertilizer market also see an improvement as a result? Judging from the current situation, it’s not very optimistic. First, is the rebound in urea prices an illusion? In response to this rebound in urea prices, there has been a strong reaction from those in the fertilizer industry; some believe that urea prices have reached their lowest point and that a real rebound is now underway ； Some others believe that the urea rebound is only a short-term effect, and they remain pessimistic in the long term. According to an analysis by China Fertilizer Network, the daily production of urea remains at around 135,000 tons. The recent increase in urea sales is mainly due to rising industrial demand, particularly from compound fertilizer manufacturers and plywood producers; however, agricultural demand remains low, with only limited needs for top-dressing wheat crops, and that too after the Spring Festival. Additionally, recent tenders in India have helped to reduce domestic urea inventory levels. As a result, price increases can be expected during this period, though such increases are likely to last for about half a month. Whether prices will remain high in the long term will depend on various other factors. Secondly, chlorine-based compound fertilizers are available at low prices – when will this bottom out? On the one hand, the continuous decline in raw material prices ； On the other hand, the weak demand in the winter storage market means that, under this dual pressure, the prices of compound fertilizers have to keep falling. When will this decline come to an end? Although urea has seen a slight rebound recently, no long-term upward trend can be observed for now. For the comprehensive winter storage of compound fertilizers to begin, it is likely that urea prices will need to rise by around 100 yuan per ton first. Recently, in Jiangsu province, the price of 45% chlorinated general-purpose compound fertilizers reached 1750 yuan per ton at the factory gate, representing a drop of 250 yuan per ton compared to the end of the autumn fertilizer demand period. Additionally, there is still a tendency for phosphatic and potassic fertilizers to see price declines; in particular, the price of ammonium chloride continues to fall. One ammonium chloride production facility in Jiangsu remains shut down, with no definite date for resuming operations, while other facilities are operating normally. Currently, the average factory gate price for wet ammonium chloride in this region is around 400–440 yuan per ton, with lower-quality products costing 380 yuan per ton. Therefore, it is still difficult to determine whether a price floor of 1750 yuan per ton for compound fertilizers can be established. Finally, the road to winter storage is difficult and long; when will fertilizer prices emerge from their low point? It may be the period that everyone is looking forward to, but in the short term the conditions are not yet right. Only if raw material prices improve overall and demand for compound fertilizers in the market reaches its peak could there be a recovery; for now, we can only wait and observe patiently. (Yang Xiaomei)