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Urea prices remain bullish; no hope of a rebound in monoammonium nitrogen prices. Author/Source: China Fertilizer Network. Date: 2019-12-06. Clicks: 5. In the past two weeks, urea prices have continued to rise, with some companies increasing their prices by as much as 100 yuan per ton. This price increase is mainly driven by an increased demand from downstream users. It is reported that compound fertilizer manufacturers in regions such as Shandong are making timely purchases of supplies, while large agricultural supply companies and traders are also showing interest in purchasing urea. Some distributors in regions like Henan are buying urea in advance for use as fertilizers to promote the growth of winter wheat. The demand for urea is improving. Additionally, some production facilities in regions such as Sichuan are under maintenance, which has led to a reduction in overall production levels. As a result, urea supply is tight in the short term; some companies in certain areas have temporarily stopped taking orders and are waiting for supplies to become available. Although urea prices in regions such as Shandong have stabilized after rising, supported by current levels of orders awaiting shipment from factories and other factors related to labeling, prices are expected to remain stagnant in the short term on a bullish note. In any case, urea is currently in demand, while monoammonium phosphate is facing some difficulties. Recently, the ex-plant price in cash for 55% ammonium sulfate powder in Hubei has dropped to 1,750 yuan, while the actual price upon acceptance for 58% ammonium sulfate powder is also only 1,850–1,900 yuan ； The ex-plant price of 55% ammonium sulfate produced by large manufacturers in Sichuan has dropped to 1,750 yuan; prices can still be negotiated for actual transactions ； The actual ex-plant prices for 55% ammonium sulfate powder and 58% ammonium sulfate powder produced by small factories in Yunnan are only around 1,700 yuan and 1,800 yuan respectively ； The pick-up price at the Bayuquan Port for 55% ammonium sulfate is around 1,930 yuan. The prices mentioned above have dropped by 30–50 yuan compared to before the phosphate compound fertilizer meeting, indicating a weak market for monoammonium fertilizers. So why has this situation arisen? First of all, the hard demands cannot be met. By early December, the operating rates of various compound fertilizer manufacturers began to rise gradually, though the increase was not significant. This was mainly due to environmental and safety inspections in certain areas, which slowed down the overall recovery in production; some compound fertilizer manufacturers continued to operate at reduced capacity. The consumption rate of the guaranteed ammonium sulfate purchased by compound fertilizer companies in the early stage is relatively slow; in some cases, the ammonium sulfate purchased has not yet been fully delivered to the factories. The estimated demand for ammonium sulfate for winter storage was originally low. It is reported that although there has been an increase in orders recently, the actual volume of transactions remains low. Fertilizer companies with existing stock are not in a hurry to make new purchases, especially those with large inventories of finished products. Secondly, there is no shortage of supply from enterprises. Previously, the inventory accumulated by ammonium nitrate producers before November was gradually being used up as a result of the decline in their production rates. In November, those production rates were supposed to start rising again, but after the meetings in mid-November, the market conditions were not favorable, and the overall production rate of ammonium nitrate remained low. Larger manufacturers reduced production while smaller ones stopped operating altogether. This situation should have helped improve the market for ammonium nitrate, but overall, production levels have remained low throughout the year. Moreover, the shrinking demand in downstream markets has not provided much positive support for this sector. Currently, demand for ammonium nitrate is poor, and even with low production rates, there are no signs of an improvement in the market situation, indicating that supply is not tight. It is reported that ammonium nitrate producers in regions such as Hubei have begun to accumulate inventory again, which is a concerning development. Once again, raw material prices are holding things back. Although the inventory of sulfur at ports dropped from around 2.4 million tons to around 2.2 million tons in the early period, sulfur has arrived at various ports again recently. As of November 30, the overall inventory of sulfur at ports has risen to 2.6 million tons. After a slight increase earlier on, sulfur prices have remained stable; currently, the price of granular sulfur at the Yangtze River ports is around 495 yuan, while the prices at the Puguang sulfur plants in Wanzhou and Dazhou are around 520 yuan and 470 yuan respectively over the past two weeks. It is unlikely that sulfur prices will see a significant rise in the short term. After a slight decline earlier, the price of phosphate rock has remained stable for now, mainly due to disruptions in mining and transportation in mines in regions such as Hubei caused by weather conditions; stability is expected to prevail in the short term. The price of liquid ammonia remains low; currently, the mainstream ex-factory price in Hubei is only 2380–2400 yuan. In summary, although enterprise production remains low at present, the lack of improvement in demand has led to an increase in inventory levels for ammonium nitrate producers, putting extra pressure on them. Coupled with a weak market situation for raw materials, it is expected that the price of ammonium nitrate will remain stable at low levels in the short term, with little possibility of a significant rebound. (Zhao Hongye)