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Urea and monoammonium prices keep rising; the spring fertilizer market is progressing at a rapid pace. Author/Source: China Fertilizer Network Date: 2020-03-11 Clicks: 84 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 the spring plowing season approaching, the fertilizer market at the retail level has seen a widespread uptick, and the distribution of goods has accelerated. Currently, not only is the demand for fertilizers in the downstream sector on the rise, but fertilizer prices have also increased significantly compared to before the holiday. For some types of fertilizers, the price hikes exceed 100 yuan per ton. Taking compound fertilizers as an example, the prevailing ex-factory prices for 45% sulfur-based products nationwide have risen to 2,050–2,200 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 improvement in the market for traditional fertilizers will undoubtedly boost the overall fertilizer market. Similarly, as a type of finished fertilizer, the water-soluble fertilizer market 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 keen 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, downstream demand is generally concentrated during the winter months; demand in spring and summer is relatively low. However, in the past two years, the role of water-soluble fertilizers has become increasingly important across all seasons. One reason for this is that in many regions, the planting structure has improved: the area dedicated to traditional field crops has gradually decreased, while the area under cultivation of cash crops has been on the rise, thereby increasing the demand for water-soluble fertilizers ； The second reason is the increasing level of integration of water and fertilizer management in various regions. The application of this technology not only allows for fertilization in small amounts but on multiple occasions, it also enables fertilization to be carried out in accordance with 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 category. 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 dynamics of the fertilizer market. This spring, the fertilizer market behaved differently from usual, with very active trading activity. In Hubei, the main region for phosphate fertilizer production, there was a shortage of supply, which led to rising prices for monoammonium and diammonium fertilizers ； 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 positive trend will continue in the short term. (Feng Hongyang)