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Ammonium nitrate prices reached their peak; a downward trend has set in. Author/Source: China Fertilizer Network. Date: 2020-03-19. Clicks: 6. In March, ammonium nitrate prices reached their highest levels and then began to stabilize. As time went by, the market became more rational, and starting from the middle to early part of March, ammonium nitrate prices started to decline. At the current stage, the ex-factory price of 55% powdered ammonium nitrate from large manufacturers in Hubei is generally between 1,980 and 2,000 yuan per ton (the same unit applies hereafter). Previously, some inflated prices reached as high as 2,050 yuan, but it is reported that the actual ex-factory price of 55% powdered ammonium nitrate in Hubei this week is between 1,850 and 1,900 yuan. The lower prices are usually those charged by traders, while factory sales are priced at around 1,900 yuan. This price is about 100 yuan higher than it was before the Spring Festival, and it represents the price range estimated by some large traders for ammonium nitrate. Given the current market conditions, the price of monoammonium has reached its peak; a decline is an inevitable outcome. Industry insiders believe that the pace of the decline in monoammonium phosphate prices should not be too rapid. There are roughly 3 main reasons: 1. Enterprises in Hubei plan to take advantage of the end of this peak period to close some orders at higher prices, seizing the last opportunity to maximize profits ； 2. The ammonium monoamide manufacturers that have continued to operate during the pandemic are reluctant to reduce prices too quickly; if prices drop rapidly, it will pose difficulties in fulfilling the higher-priced contracts from earlier orders, so they try to avoid unnecessary complications ； 3. Enterprises in Hubei region began to step up shipping activities gradually starting from March 10 or even earlier, and the number of shipping vehicles also started to increase again compared to the previous period; thus, a downward trend in prices for ammonium nitrate became inevitable. So, what is the specific supply and demand situation as well as the raw material market conditions at present? On the supply side. Supply from factories remains tight; companies are currently focusing on producing and shipping orders that are ready for dispatch. Especially in terms of shipping, there has been a noticeable improvement in road transport in areas such as Hubei, while water and rail transport are also operating relatively smoothly, allowing companies to handle the shipment of those orders that are ready to be sent out. In terms of production, companies that had stopped operating earlier are gradually resuming operations, focusing on fulfilling the orders they received prior to that time; they are not expected to take on many new orders in the short term. Those companies that continued to produce during the pandemic are still working on fulfilling existing orders, and it is likely they will continue to do so until at least the end of the month. They too will not take on a large number of new orders in the short term, opting instead to accept only a moderate amount of new orders. As a result, the overall supply from ammonium nitrate factories remains tight. On the demand side. At present, downstream compound fertilizer manufacturers have largely completed the procurement of raw materials for spring fertilizers. Unlike in previous years, although the demand for monoammonium phosphate for spring fertilizers is generally low, the impact of outbreaks in regions such as Hubei has led these manufacturers to believe that the supply of monoammonium phosphate will be tight and its prices will rise; as a result, they have started purchasing it. However, the procurement of raw materials for spring use by these manufacturers is now entering its final stage. It is reported that some large compound fertilizer producers have already acquired 70–90% of the necessary raw materials, and they are waiting for the previously purchased monoammonium phosphate to arrive before formulating new procurement plans. Recently, some traders believe that monoammonium has reached its peak, and they are now starting to release shipments so as not to miss out on sales opportunities when the monoammonium manufacturers are able to take on new orders in the future. Regarding raw materials, attention is still mainly focused on changes in sulfur. Initially, influenced by the market sentiment surrounding ammonium phosphate, there was a strong upward trend in sulfur prices. Additionally, domestic prices of Puguang sulfur continued to rise; as a result, port sulfur prices increased by nearly 100 yuan during that period. However, this positive trend did not last long. With declining international market conditions and domestic sulfur inventories at ports reaching around 3 million tons, a tug-of-war ensued between buyers and sellers in the sulfur market. Currently, the price of granular sulfur at ports such as the Yangtze River Port has retreated from its peak and stabilized at 685 yuan. In the long run, there is little chance of a significant rebound in sulfur prices. Although the price of liquid ammonia has risen slightly compared to earlier periods, it remains at a low level; currently, the standard ex-plant price for liquid ammonia in Hubei is between 2550 and 2600 yuan. Overall, raw materials do not provide significant support for the cost of monoammonium. In summary, in the short term, the price of monoammonium phosphate will remain seemingly stable while actually declining. As the overall operating rate of monoammonium phosphate production gradually recovers and shipments become smoother, it is expected that there will be a significant price drop in the future. (Zhao Hongye)