The annual meeting was bustling, while the fatty market remained deserted

Thread Content

The annual meetings are in full swing, while the fertilizer market remains quiet. Author/Source: China Fertilizer Network Date: 2020-01-19 Clicks: 594 Recently, fertilizer companies across the country have been holding their annual award ceremonies at full speed, reflecting on the outstanding achievements of 2019 and looking forward to the ambitious plans for 2020. With less than a week left before the Spring Festival, companies are less enthusiastic about negotiating new orders; they merely await orders before shipping. Some smaller factories will shut down for a few days during the festival and resume operations afterward, depending on the situation. As a result, the fertilizer market remains quiet. 　　As the leading product in the fertilizer market, urea has remained stable at high levels recently, with only slight fluctuations; the market activity has gradually slowed down. Entering January, compound fertilizer manufacturers across various regions tend to stock up on urea in advance to ensure normal production during and shortly after the Spring Festival. Urea is also primarily used for applying fertilizers to winter wheat in areas such as Henan after the festival. As a result, before the Spring Festival, there is increased interest in urea among compound fertilizer manufacturers, traders, and local distributors, along with higher enthusiasm for making purchases compared to previous periods. In recent days, many urea manufacturers have a certain number of pending orders to support their production, so the sales pressure is not high at the moment. Urea prices are likely to remain stable before and during the Spring Festival; however, demand is expected to increase after the festival, which could lead to a slight price rise. 　　The sluggish market for monoammonium phosphate continues; in January, new orders with guaranteed prices valid until the end of February or March can be negotiated. It is reported that the mainstream ex-plant price for 55% powdered monoammonium phosphate in Hubei has dropped slightly to 1750–1800 yuan per ton, with the actual price at which it is delivered being 1730–1780 yuan per ton. The mainstream ex-plant prices for 58% and 60% powdered monoammonium phosphate have dropped to around 1900–1950 yuan and 2000 yuan per ton respectively, with transaction prices being close to these quoted levels. Large manufacturers in Yunnan offer an ex-plant price of 1600 yuan for 55% powdered monoammonium phosphate, 1710 yuan for 58% powdered monoammonium phosphate, and 1820 yuan for 60% powdered monoammonium phosphate. Ahead of the Spring Festival, some compound fertilizer manufacturers intend to replenish their stocks of monoammonium phosphate. They believe that the risks associated with purchasing monoammonium phosphate at present are relatively low. However, they remain cautious in their procurement efforts; existing inventories are being depleted slowly, and given the significant pressures facing the compound fertilizer industry itself, new purchases are being made only with great caution. There should be little activity in the market during the days leading up to the festival. In the short term after the Spring Festival, the market for monoammonium phosphate is likely to remain sluggish. 　　There were no major changes in the price of potassium fertilizers before the New Year, and the market outlook remains unfavorable after it. What has received relatively much attention in the industry recently is likely the specific quantity and price agreed upon for border trade in January. As of now, the price for 62% white potash in border trade is 1,960 yuan, while the price for large red particles is 2,080–2,100 yuan. There are rumors that the price of potassium chloride at ports will rise after the New Year, but most industry insiders still lack much confidence in this. Although the new prices for salt lakes increased in January, it is reported that the selling prices set by agents have not changed significantly compared to before, and sales basically came to a halt in the days leading up to the Spring Festival. 　　The market for compound fertilizers remained sluggish before the New Year. The prices set for downstream distributors earlier were relatively low; some of these prices were even lower than those of the popular products from before. However, most distributors did not stock up in large quantities, and they made purchases only in sufficient amounts to ensure that there was stock available in their warehouses. Compound fertilizer companies still face internal pressures; operations are limited, sales are not satisfactory, and transportation is also somewhat hindered. No major actions are expected before the Spring Festival, as the process of replenishing raw material stocks ahead of the festival has come to an end. Although there is an expectation of further stock replenishment after the Spring Festival, this will likely occur at a slow pace. 　　In summary, the fertilizer market is not expected to see any significant improvement before or in the immediate period after the Spring Festival. Among the products whose prices are likely to improve after the festival, urea will be at the top of the list. As a popular product in the fertilizer industry, an increase in its prices will likely have a positive impact on the entire fertilizer market. 　　 　　(Zhao Hongye)