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Ammonium nitrate: Unclear prospects as traders sell at lower prices Author/Source: China Fertilizer Network Date: 2020-03-11 Clicks: 2 Last week, it was reported that some traders had started selling ammonium nitrate at lower prices. Upon hearing this news, some in the industry believed that the situation for ammonium nitrate was concerning. However, there is no need for panic at the moment. Traders are reducing prices because they believe that the upward trend in ammonium nitrate prices has temporarily come to an end, and the market is gradually becoming more rational. Now is a good time to get rid of their stock of ammonium nitrate, allowing them to earn some profit as well. In fact, recently the pricing at ammonium nitrate factories has remained relatively stable; however, some companies in certain regions have raised their prices by around 50 yuan per ton, depending on their own circumstances. For example, the ex-plant price of 60% powdered ammonium nitrate at a large factory in Guizhou has been increased to 2350 yuan, while the ex-plant price of 60% powdered ammonium nitrate at smaller factories in Yunnan rose to 2100 yuan this week. It can be seen that companies’ quotes remain stable or even slightly rising, while traders are cutting prices – so what will be the fate of monoammonium? On the supply side. For ammonium sulfate plants, there are still many orders pending fulfillment at the moment. Although some companies were able to accept new orders this week, most of them are still focused on producing and shipping the orders that are already pending. It is reported that transportation by ship or road is not yet smooth; although road transportation has improved compared to before, the limited number of vehicles means that many companies unable to use road transport also face difficulties in getting their ammonium sulfate products loaded onto ships. In the short term, it is not possible for these companies to accept a large number of new orders. The pending orders for these companies can be fulfilled until around the end of March. It is expected that after March 25th, the backlog of pending orders will be resolved, allowing companies to start accepting new orders again. At present, there is still a demand gap for monoammonium phosphate among enterprises, so it is normal for prices to remain strong. In some areas, enterprises have low production levels and are temporarily out of stock; therefore, it is not unreasonable for prices to continue rising. On the demand side. After a period of shortage of monoammonium phosphate and intense purchasing activity, the market is gradually returning to normal. Most compound fertilizer manufacturers have acquired a certain amount of this raw material, especially the large compound fertilizer producers who are key customers of monoammonium phosphate companies; these companies now have some stock of monoammonium phosphate, with more arriving continuously. Additionally, given that monoammonium phosphate production in Hubei is set to resume gradually, leading to an increase in supply, compound fertilizer manufacturers have slowed down their purchases of this material and are not in a hurry to make new orders at the moment. Moreover, the spring market is dominated by high-nitrogen fertilizers, resulting in relatively low demand for the raw material ammonium sulfate; after the initial period of intense buying, demand has gradually decreased. In terms of raw materials. Although sulfur prices have been rising gradually and the market atmosphere has been positive in recent times, the international situation has deteriorated in recent days, and the situation in port markets has also changed. Coupled with the long-term negative factor of high inventory levels, sulfur prices might shift from rising to falling. Currently, the price of granular sulfur at ports such as the Yangtze River Port is 695 yuan, while the prices at the Wanzhou Port and Dazhou plant for Puguang sulfur are 680 yuan and 630 yuan respectively. Even if prices do not fall in the near term, a significant increase is unlikely. The domestic sulfuric acid market has seen a slight decline in some areas; overall trading activity is low, and demand provides insufficient support, so it is unlikely that there will be any positive developments in the market in the short term. In summary, in the short term, ammonium sulfate plants will not face much sales pressure; orders are pending, so prices should remain stable. However, in the long run, demand from downstream industries is no longer urgent, raw material conditions are poor, and the supply of ammonium sulfate is increasing gradually. As a result, there is a risk of price drops for ammonium sulfate in the future. (Zhao Hongye)