The arrival price of Northeastern diammonium phosphate falls below 2,300 yuan; are blended fertilizers left with no place to exist?

Thread Content

The arrival price of Northeastern diammonium phosphate falls below 2,300 yuan; are blended fertilizers left with no place to exist? Author/Source: China Fertilizer Network Date: 2020-01-22 Clicks: 381 In the middle and late part of January, as the Spring Festival approached, fluctuations appeared in the otherwise stable phosphate fertilizer market. The price of diammonium phosphate, which was already at a low level, dropped further. With its price continuing to fall, is the sales situation for blended fertilizers in the Northeast region still good? First, what are the reasons for the decline in the price of diammonium? The imbalance between supply and demand is an inevitable issue. In 2018, there was a large surplus of diammonium phosphate, and in 2019 the domestic demand for this substance remained low; especially as prices continued to fall, downstream manufacturers were reluctant to make large purchases. At the same time, demand for phosphate fertilizers did not increase, making it difficult to export diammonium phosphate domestically. As a result, large amounts of inventory accumulated in the domestic market, which led to a decline in prices. Currently, the price of 64% diammonium phosphate upon arrival in the Northeast region has dropped below 2400 yuan per ton, with some lower-quality batches from Chifeng in Inner Mongolia even reaching 2280 yuan per ton. Such low prices are quite rare in recent years. Secondly, the prices of mixed fertilizers in the Northeast vary, and downstream buyers are not active in purchasing them. According to the incomplete research conducted by the editors of China Fertilizer Network recently, prices for blended fertilizers in the Northeast region are quite chaotic. Last winter, during the stockpiling period, the price of such fertilizers was around 47-48 yuan per unit of content; this year, however, it is around 38-43 yuan per unit of content. Taking a 55% concentration level as an example, the factory price ranges from 2100 to 2370 yuan per ton. Some functional blended fertilizers even have higher prices. With such large variations in prices, coupled with the continuous decline in the price of diammonium phosphate as a raw material, it becomes even harder for end-users to understand the dynamics of fertilizer prices. As a result, there is a greater tendency to be cautious when purchasing fertilizers. Once again, what percentage of the fertilizer stockpiling will be completed in the lower reaches of the Northeast before the New Year? At present, the fertilizer preparation situation in Jilin and Liaoning provinces is fairly good. In southern Heilongjiang, the amount of fertilizer prepared already accounts for about 30-40% of the total amount prepared in previous years. However, the situation in northern Heilongjiang and some areas in Inner Mongolia is not so optimistic; there is a strong tendency to wait and see before taking action, with many planning to start preparing after the Spring Festival. The years-long pattern of fertilizer prices rising during off-peak seasons and falling during peak seasons has left some in the fertilizer industry deeply frustrated; as a result, even though fertilizer prices dropped slightly before the New Year, demand from end-users remained unchanged, not to mention the chaos surrounding the prices of blended fertilizers. Finally, the market for diammonium fertilizers is poor, and the situation for compound fertilizers during winter storage is not much better. The Spring Festival is approaching, and it is expected that there won’t be any significant fluctuations in prices in the short term. The issues related to pigs are coming to an end, and the Year of the Rat is upon us. May the fertilizer market have good fortune in the Year of the Rat in 2020. (Yang Xiaomei)