Positive developments: prices of sulfur-based fertilizers exceed 2,200

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Positive developments: Prices of sulfur-based fertilizers exceed 2,200. Author/Source: China Fertilizer Network. Date: 2020-03-04. Clicks: 190. At the beginning of March, the spring fertilizer market officially kicked off, and compared to earlier periods, the atmosphere in the fertilizer market has indeed become much more positive recently. As the most important market phase of the year, the spring plowing season generates high expectations; both upstream manufacturers and downstream distributors aim to secure a share of the market. Given the particular circumstances of this spring’s market, the situation regarding compound fertilizers has taken a turn, which to some extent has accelerated the preparations for spring plowing. 　 Since mid-February, the prices of compound fertilizers have been rising in various regions; in some areas, the increase in prices for lower-tier products has even exceeded 100 yuan. According to Zhongfei Net, as of now, the average ex-factory price of 45% sulfur-based general-purpose compound fertilizers across the country ranges from 2050 to 2200 yuan per ton. Some believe that prices may continue to rise in the future. So, what factors are driving such an increase in the prices of sulfur-based fertilizers? 　Firstly, the raw materials are favorable. Recently, the domestic urea market has shown a steady upward trend. Manufacturers have a satisfactory number of pending orders. Coupled with factors such as the gradual resumption of industrial operations and growing agricultural demand, producers are inclined to maintain higher prices. In Shandong and the Henan-Hebei regions, the prevailing ex-factory prices for urea range from 1,730 to 1,760 yuan per ton. In Linyi, compound fertilizer manufacturers have raised their purchase price for urea to 1,800 yuan per ton ； Companies in Hubei that produce ammonium nitrate still do not provide prices to external clients, and they have also suspended taking on new orders; their production is limited to orders that are already pending. It is reported that some large manufacturers have raised the ex-plant price of 55% powdered ammonium nitrate for their key customers to 2,050 yuan per ton. At present, the overall production rate of these companies in Hubei is less than 30%, and it is expected that prices for ammonium nitrate may continue to rise in the short term. 　Secondly, there are positive demand factors. Apart from the raw material market conditions that help sustain the prices of compound fertilizers, downstream demand is equally crucial. Currently, spring-related demand is beginning to emerge in many regions, and market trading activity has significantly improved. In some areas, there is even a slight shortage of supply. One reason for this is that last winter’s inventory buildup was relatively weak; downstream buyers made limited purchases. Given the sluggish prices of compound fertilizers during that period and the overall weak fertilizer market conditions, confidence among buyers to stock up on products was very low, resulting in a strong tendency to wait and see ； The second reason is that this year’s Spring Festival holiday has resulted in a longer market cycle; most dealers plan to wait until the market situation becomes clearer before making any decisions. With the recent rise in the prices of compound fertilizers, downstream buyers are now more eager to purchase them. 　Finally, there are positive supply factors. As the saying goes, \"when supply is tight, prices rise.\" The fertilizer market has reflected this trend recently; production and distribution in some areas are concerning, with slight shortages in supply in certain regions. Companies are taking advantage of this situation to raise prices. However, demand from end-users remains decent. One reason for this is that as the season approaches, the end markets come online, leading to a surge in demand that quickly strains supply. The tighter the supply, the greater the enthusiasm of end-users to purchase goods ； The second reason is that the time when transportation will fully resume is uncertain; downstream distributors do not dare to take the risk of waiting any longer, so they have to return to the market in advance to ensure that there is fertilizer available for sale during the spring planting season. In summary, with spring plowing approaching and the retail market becoming increasingly active, along with favorable conditions in terms of raw materials and supply and demand, the compound fertilizer market is expected to remain strong in the short term. As for whether prices will rise significantly in the future, it will be necessary to further monitor market trends. (Feng Hongyang)