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Urea and monoammonium prices keep rising; the spring fertilizer market is on an upward trend. Author/Source: China Fertilizer Network Date: 2020-03-11 Clicks: 7 In mid-March, the spring fertilizer market saw active development, with trading conditions in many areas being significantly better than in the previous period. With spring plowing approaching, the market for end-use fertilizers has seen widespread activity, and the pace at which goods are delivered is accelerating. Currently, not only is there an increase in demand for fertilizers at the downstream level, but also the prices of chemical fertilizers have risen significantly compared to before the holiday period; the price increase for some types of fertilizers exceeds 100 yuan per ton. Taking compound fertilizers as an example, the standard factory prices for 45% sulfur-based products across the country have risen to 2050–2200 yuan per ton. For traditional fertilizers, the spring plowing season is particularly important. With the increase in demand recently, the prices of chemical fertilizers have risen, and they are likely to remain at high levels in the short term. The recovery in the market for traditional fertilizers will undoubtedly drive the overall fertilizer market forward. As well, the market for water-soluble fertilizers, which are also a type of finished fertilizer, is attracting increasing attention. Although it is not yet the peak season for demand for such fertilizers, their market performance is quite promising. First, the discount margin has narrowed. Positive developments are emerging: while compound fertilizers are raising their prices, water-soluble fertilizers are not far behind. Most companies maintain firm pricing levels and have reduced the extent of their discounts; some companies even plan to increase their prices. The reasons for this are favorable market conditions for raw materials – the prices of raw materials used in water-soluble fertilizers such as industrial ammonium nitrate and potassium dihydrogen phosphate have risen significantly, demand is high, supply is tight, and these prices are likely to remain high in the future ； The second reason is that companies are inclined to maintain high prices. In the past, when transaction volumes were high, significant discounts would be offered; however, with the market remaining strong recently, companies have started to reduce the extent of these discounts in order to further stimulate demand from downstream sectors. Secondly, demand increases during the off-season. For water-soluble fertilizers, demand is generally more concentrated in the winter months, while demand during spring and summer is not very high. However, in the past two years, the role of water-soluble fertilizers has become increasingly important across all seasons. One reason for this is the improvement in the cropping structure in many areas: the area dedicated to traditional field crops is gradually decreasing, while the area devoted to cash crops is increasing year by year, which in turn leads to an increase in demand for water-soluble fertilizers ； The second reason is the increasing level of integration of water and fertilizer application in various regions. The use of this technology not only allows for fertilization in small amounts but on multiple occasions, it also enables fertilization to be carried out according to the crop’s nutrient requirements, thereby reducing volatilization and **improving the efficiency of fertilizer use. Finally, the overall market atmosphere. Unlike traditional fertilizers, the price of water-soluble fertilizers does not fluctuate frequently; minor changes in raw materials or supply and demand do not lead to significant price swings in this type of fertilizer. It is not common for companies to adjust their prices. However, recently companies have shown a strong tendency to maintain high prices, mainly due to the overall conditions in the fertilizer market. This spring, the fertilizer market behaved differently from usual, with very active trading activity. In Hubei, the main region for phosphorus fertilizer production, there was a shortage of supply, which led to rising prices for monoammonium phosphate and diammonium phosphate ； Demand for urea is strong, and upstream supply is also slightly insufficient, which has supported recent price increases. In summary, the fertilizer market saw a strong start to the spring season; while traditional fertilizers experienced the much-anticipated boom in demand, water-soluble fertilizers also took advantage of rising prices, and it is expected that this strong market trend will continue in the short term. (Feng Hongyang)