Thread Content
Fertilizer Market Booms in Spring Plowing Season; Rising Prices Dominate the Scene Author/Source: China Fertilizer Network Date: 2020-03-09 Clicks: 7 With the official start of the spring fertilizer market, activity in this sector has become intense; both upstream manufacturers and downstream distributors seem to have shaken off their difficulties and returned to the market. Compared to the winter storage situation in the previous phase, the compound fertilizer market has been quite favorable recently; not only have prices gradually risen, but demand has also improved significantly. During this critical period of preparing fertilizers for spring plowing, compound fertilizers have truly seen improvements, which has boosted the confidence of market participants. Currently, across the country, the prevailing ex-factory prices for 45% chloro/sulfur-based general-purpose compound fertilizer products are 1,900–2,000 yuan per ton and 2,050–2,200 yuan per ton respectively; both figures have increased by nearly 100 yuan compared to the period before the Spring Festival. Despite these price rises, there has been no decline in the enthusiasm of downstream buyers to purchase these fertilizers. At present, the trading atmosphere in most regions is quite active. So, will market conditions remain high throughout the spring season? Firstly, cost support. The price trend of compound fertilizers depends to a large extent on the prices of raw materials, and currently those raw material prices are rising collectively, with quite significant increases. The price of urea has seen a sharp rise; currently, its price is 150 yuan per ton higher than it was on the eve of the Spring Festival. In Shandong province, the typical ex-factory price for urea is between 1790 and 1800 yuan per ton, while the price of compound fertilizers in Linyi has risen to around 1860 yuan per ton. With increasing demand in both industrial and agricultural sectors during the spring season, further price increases are likely ； In addition, the strong market performance of ammonium fertilizers is also worth noting; the situation for potash fertilizers has improved as well compared to earlier periods, and costs related to compound fertilizers have once again become a positive factor. Secondly, end-demand. Recently, in addition to fulfilling the orders received in advance, compound fertilizer manufacturers are seeing positive trends in new orders; some even report a shortage of supply. The reason for this is that as the season approaches and the end-market starts to activate, goods from upstream suppliers begin to flow in increasingly, which has significantly reduced the previous backlog in the market. Even with rising prices, there is greater willingness to accept them ； The second reason is that there is still residual demand in the end-market; the winter stockpiling activity ahead of the festival was relatively weak, with downstream distributors purchasing only in a tentative manner and in limited quantities. Affected by the pandemic, the market remained stagnant after the festival, but it has now started to recover in most areas, allowing the end-market to function properly again. Finally, the environment in Fei City. Another major reason for the gradual increase in the price of compound fertilizers is the overall high level of the fertilizer market; most types of fertilizers have shown an upward trend in prices to varying degrees. Taking diammonium phosphate as an example, which serves as a substitute for compound fertilizers, since March many manufacturers of this product have raised their prices again. The price of 64% diammonium phosphate upon arrival in Heilongjiang has risen to 2500–2550 yuan per ton, and some factories have even suspended or restricted orders. With strong demand on the downstream side and tight supply on the upstream side, there is still a high likelihood of further price increases in the future ； Furthermore, as mentioned above, the prices of nitrogen, phosphorus, and potassium fertilizers are all at high levels, contributing to an upward trend in fertilizer prices in the market. In summary, this spring the fertilizer market deviated from its usual pattern, with price increases taking precedence. Driven by various positive factors, the market for compound fertilizers is showing a gradual recovery trend; prices are expected to rise slightly in the short term, with the exact extent depending on developments in the prices of raw materials. (Feng Hongyang)