Having stock is the key

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Having stock is key – Author/Source: China Fertilizer Network, Date: 2020-03-05, Clicks: 18. The key issue regarding monoammonium fertilizers these days isn’t likely to be \"price\" or \"price increases\", but rather the problem of \"no stock\" or \"shortages\". At present, most ammonium sulfate producers, especially those in Hubei, are not offering quotes to external clients and have suspended taking on new orders; they focus on fulfilling orders from their key customers from earlier. The few companies in other regions that do offer quotes often have no stock available. The product with good sales performance at the moment is 55% powdered ammonium sulfate. It is reported that large manufacturers in Hubei have raised their ex-factory prices for their customers to 2050 yuan per ton, while large manufacturers in Sichuan have increased the ex-factory price of 55% powdered ammonium sulfate to 2000–2100 yuan. 58% and 60% powdered ammonium sulfate perform less well in terms of sales, but due to their relatively low production volumes, they are also in short supply. Large manufacturers in Guizhou charge as much as 2300 yuan per ton for 60% powdered ammonium sulfate. In fact, it’s not surprising to encounter high quotes these days; high prices mainly indicate that the company has no stock, is out of stock, or does not have items available on hand, and even if the prices are high, the goods cannot be delivered in the short term. 　　So what is the specific situation regarding Yianmu at the moment? 　　First is the supply and demand relationship. At present, there is a tight supply and strong demand. At present, Yianmeng mainly handles orders received in February, and production is expected to continue until at least the end of March. Some companies, due to prolonged shutdowns earlier on, are still producing orders placed at lower prices from that period, and thus are unable to take on orders with higher prices in the short term. In Hubei, the main production region, although business operations by enterprises have seen a slight recovery compared to earlier periods, the operational rate remains below 30%. Some companies that have stopped production are expected to resume operations after March 10; once they do restart, they will primarily focus on fulfilling existing orders and are unlikely to take on new orders for now. Even if they are able to accept new orders, they will usually handle only a limited number of orders per key client. I heard that some facilities at large factories in Hubei resumed operations last week, with tens of thousands of tons of orders received; they will not take on any new orders for the time being. The inventory of ammonium nitrate that manufacturers in certain areas had accumulated earlier has also been gradually cleared. In terms of transportation, it is reported that the situation in Hubei’s road transport sector has improved slightly recently, but there are still few vehicles available. Business owners opt for water and rail transport, while road transport in other regions operates more smoothly compared to Hubei. 　　Recently, many downstream compound fertilizer manufacturers have expressed an interest in purchasing ammonium nitrate. Some of these companies purchased only small quantities of ammonium nitrate in February; this is mainly due to the supply limits imposed by each ammonium nitrate production facility. Additionally, it is currently the season for preparing fertilizers for spring planting, and as a result, some compound fertilizer manufacturers had low production levels throughout 2019, with little inventory of finished products. Production is gradually resuming, and the raw materials needed for production are being actively acquired. Therefore, most compound fertilizer manufacturers still intend to purchase ammonium nitrate as a raw material in the near future. The recent rise in the prices of nitrogen, phosphorus, and potassium-based raw materials in the Northeast region indicates that some companies that produce compound fertilizers and blended fertilizers are eager to purchase these raw materials. Recently, many customers from the Northeast have inquired about the availability of raw materials such as monoammonium phosphate. 　　Secondly, it is necessary to observe the market trends for raw materials. Recently, attention has been focused on the latest developments regarding sulfur, the raw material in question. Prices for granular sulfur at ports such as the Yangtze River Port and Fangchenggang Port have finally been updated; previously, the price of granular sulfur was 610 yuan before the Spring Festival, while it is now 650 yuan. The market atmosphere is currently positive, with electronic trading platforms driving up prices and the value of the dollar rising. Although the inventory of sulfur at these ports remains high, around 3 million tons, the overall positive market trend, coupled with rising domestic sulfur prices, suggests that port sulfur prices may continue to increase in the short term. 　　In summary, there is a shortage of supply relative to demand in the short term, and the overall market atmosphere for fertilizers and related industries remains positive at present; therefore, prices for ammonium nitrate are likely to continue rising. For now, companies are focusing on fulfilling existing orders. 　　(Zhao Hongye)