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Weak demand for winter storage of diammonium phosphate leads to low prices _ Author/Source: China Fertilizer Network Date: 2020-01-09 Clicks: 204 I. Performance of the domestic diammonium phosphate market 1.1 Changes in the domestic diammonium phosphate price index Last week (December 30, 2019 – January 3, 2020), demand for winter storage of diammonium phosphate in the domestic market remained weak, resulting in low prices. http://img.yf116.cn/image/img/20200109/1458305391080.PNG On January 6, China’s wholesale price index for diammonium phosphate (CPPI) was 2625.38 points, down by 1.21 points on a month-on-month basis, representing a decline of 0.05% ； A decrease of 305.73 points on a year-on-year basis, representing a decline of 10.43% ； It dropped by 596.39 points from the base period, representing a decline of 18.51%. http://img.yf116.cn/image/img/20200109/1459185395881.PNG On January 6, China’s Retail Price Index for diammonium phosphate (CPRI) was 2764.44 points, up by 0.76 points on a month-on-month basis, representing a growth rate of 0.03% ； A decrease of 266.58 points on a year-on-year basis, representing a decline of 8.79% ； It dropped by 457.33 points from the base period, representing a decline of 14.19%. 1.2 Trends in domestic market prices of diammonium phosphate According to data from 23 provinces monitored by the association, the wholesale prices of diammonium phosphate in China remained relatively stable on a week-on-week basis. Among them, the price in Xinjiang increased by 3 yuan per ton, while the prices in Hubei and Gansu provinces dropped by 54.5 yuan per ton and 40 yuan per ton respectively; prices in the other provinces remained stable. The weekly change in the retail price of diammonium phosphate in China remained generally stable. Among them, the prices in Sichuan and Xinjiang rose slightly by 10 yuan/ton and 29.7 yuan/ton respectively, while the price in Hubei Province dropped by 64.7 yuan/ton; prices in the other provinces remained stable. II. Market supply of diammonium phosphate 2.1 Operating rates of diammonium phosphate manufacturers According to data from BaiChuan Information, last week the average operating rate of diammonium phosphate manufacturers was 60.32%, with little change on a weekly basis. 2.2 Market inventory of diammonium phosphate According to customs data, domestic port inventory of diammonium phosphate last week was around 217,000 tons, a slight decrease of 8.44% compared to the 237,000 tons recorded the previous week. There were few new export orders from companies, and due to low export prices, companies were less inclined to export, focusing instead on the domestic market. III. Market demand for diammonium phosphate In the domestic market, the winter storage process for diammonium phosphate is progressing slowly. Although most transactions in the market come with guaranteed prices and interest calculation policies, the influence of low prices in some markets has led to cautious purchasing behavior among many distributors; as a result, there are few new orders, with companies mainly focusing on shipments. The international market for diammonium phosphate is in a period of low demand; there is limited volume of new orders, and the joint production cuts by OCP and Mosaic have little impact on market conditions. The company’s sales focus is on the domestic market, with export prices remaining stable at $290–295 per ton FOB. IV. Situation of raw materials for diammonium phosphate 4.1 Situation of the sulfur market Before New Year’s Day, domestic trading companies showed little enthusiasm for trading, and the spot market for sulfur at ports continued to feature high prices and low volumes. Although electronic disk prices continue to rise, the spot market is responding slowly, with traders maintaining a cautious attitude. After New Year’s Day, both buyers and sellers adopted a wait-and-see approach, awaiting new price cues from the overseas markets. In the short term, the sulfur market price is expected to remain stable. 4.2 Trends in the phosphate rock market The phosphate rock market remains stable, with downstream companies purchasing according to their needs; there is limited volume of new orders, and companies are primarily focused on selling their stock. Affected by the poor market conditions for phosphate fertilizers, discounts were offered on phosphorus ore transactions in the upper reaches of the Yangtze River, while prices remained stable in the middle and lower reaches. Currently, the transaction price for shipboard-grade phosphorus ore with a grade of 28% in Hubei region is between 390 and 400 yuan per ton. After New Year’s Day, phosphate rock mining will gradually come to a halt in some areas; as a result, supply will decrease. Moreover, as the end of the year approaches, purchasing by downstream industries will also slow down. Based on the above, it is expected that the market price of phosphate rock will remain stable before the Spring Festival. 4.3 Trends in synthetic ammonia The overall trading atmosphere in the liquid ammonia market is weak; there are still occasional price drops in certain areas. Alerts have been issued in parts of the north, leading to prices falling to low levels. Some plants that produce multiple products have reduced their ammonia output to ease pressure. With an oversupply situation, the market remains weak overall. As the Spring Festival approaches, the market may see activities aimed at stockpiling goods, but upstream suppliers tend to maintain low inventory levels and there is significant production restriction; attention should be paid to weather conditions and transportation issues, as there is no strong underlying support for prices. V. Performance of the International Diammonium Phosphate Market Last week, the international market was closed due to Christmas and New Year’s Day 2020. VI. Market outlook for diammonium phosphate At present, winter storage efforts in the domestic market are progressing slowly, while the international market is in a low-demand period, with only sporadic transactions and prices remaining weak. At the end of the year, companies close their accounts for settlement; recently, there have been few new orders for diammonium phosphate, so companies are mainly focusing on making shipments. Since it is still too early for the use of fertilizers in spring plowing, it is difficult for local distributors to stock these products, and the industry generally waits until after the Spring Festival before taking action. In summary, given the weak prices of raw materials, it is expected that diammonium phosphate will remain in a state of weak consolidation before the Spring Festival; close attention should be paid to the progress of winter storage in China.