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Active decline in diammonium fertilizers – What hopes remain for winter stockpiling? Author/Source: China Fertilizer Network Date: 12-09-2019 Clicks: 111 In the blink of an eye, December has arrived; the market for winter stockpiling of various fertilizers has shown some improvement. Urine prices have generally risen, and the policies regarding winter stockpiling of compound fertilizers have become clearer, leading to relatively higher enthusiasm among downstream users to stock up. Among all products in this market experiencing a general recovery, diammonium phosphate has few positive factors; it remains stuck in a stagnant situation. Currently, the ex-factory price of 64% diammonium phosphate in Hubei province is as low as 2150–2200 yuan per ton (the same unit is used throughout) ； The pickup price at Bayuquan Port is 2,350 yuan; a discount of around 50 yuan can be negotiated upon completion of the transaction ； The advance purchase prices for 64% diammonium fertilizers at the main delivery points in the Northwest region range from 2350 to 2450 yuan. As a result of the actions taken regarding urea, prices rose across the country; in some companies that handle a large number of orders, the price increase was around 100 yuan. There was an increase in purchases in the downstream market, with various agricultural supply companies making bulk purchases. Additionally, production was halted for maintenance in certain areas, which reduced overall supply, and as a result, market conditions began to improve. Compared to urea, which takes the initiative in its actions, diammonium salts have completely lost that initiative; market conditions remain weak – so what hope is there for winter storage? First, the hard requirements are gradually activated. Due to factors such as the poor market conditions this year and chaotic pricing, the winter storage of diammonium phosphate has remained stagnant; traders tend to put the purchase of diammonium phosphate at the end of their plans for winter fertilizer stockpiling. However, as time has passed, the traditional winter storage procurement period has arrived. Inventory levels in the grassroots markets are low, and the number of orders from downstream customers is increasing gradually. Additionally, the current prices for diammonium phosphate for winter storage have dropped by around 600 yuan compared to the same period last year, and most transactions come with minimum guarantee and interest calculation policies, which to some extent alleviate the concerns of downstream distributors regarding the future market situation. As a result, sales performance for these companies has improved. Secondly, raw material prices have bottomed out and started to rise. This year, sulfur prices have fallen continuously due to high inventory levels at ports and weak demand from downstream industries. The lowest price for granular sulfur at the Yangtze River port was 480 yuan, but because the cost of raw materials in the prior period was high, some traders chose to hold back from buying, causing the price of granular sulfur at that port to rise back to around 500 yuan. Recently, liquid ammonia has seen its price continue to rise, breaking away from the downward trend of recent days; the ex-plant prices offered by the major manufacturers in Hubei province have increased by 100 yuan, reaching 2500–2530 yuan. Phosphorus ore prices have also temporarily **due to seasonal production restrictions and transportation difficulties, among other factors. The prices of the three major raw materials have stopped falling and started to rise, which is a great relief for diammonium fertilizers. Cost support is gradually being restored, and thus there is more confidence behind future pricing. Finally, the author really cannot think of any other significant positive factors. Production restrictions for companies? Or rely on exports to relieve domestic pressures? Ammonium dihydrogen phosphate manufacturers have implemented partial production cuts since September, but what has been the outcome? Market prices have continued to fall in the autumn, and now that it is December, most companies still have not taken any action; only a few factories are carrying out maintenance work in December, resulting in only limited reductions in supply. Demand in international markets is weak; the offshore price of 64% diammonium phosphate in China has dropped to $295. Inventory levels in countries such as India and Pakistan remain high, leading to weak import demand in the future. In summary, positive and negative factors coexist, leaving the market in a state of stalemate. The price of diammonium phosphate has dropped significantly; however, fortunately, the downstream market has begun to show some activity. Coupled with an improving overall environment for winter storage, and thanks to sales policies aimed at ensuring minimum sales volumes, the situation regarding the sale of diammonium phosphate has improved somewhat. (Rong Guangwen)