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Late spring to early summer: Is the market for compound fertilizers on an upward or downward trend? Author/Source: China Fertilizer Network Date: 2020-03-30 Clicks: 88 By the end of March, the spring demand for compound fertilizers was largely at its conclusion. The demand for fertilizers for spring corn planting in regions such as the Northeast, North China, and Northwest China generally starts around mid-April; most distributors already have their supplies in stock and are selling them, leaving little room for additional purchases in the future. So, is there still anything worth looking forward to regarding the market for compound fertilizers in the coming period? Firstly, the demand side already has a large capacity left, so there will be no major fluctuations in the market in the short term. According to research conducted by China Fertilizer Network, demand in the Northeast and North China regions has already exceeded 50% of the total demand (with the exception of some areas in the Northeast and Inner Mongolia). With less than half a month left before the start of fertilizer use at the grassroots level, most distributors are in the later stages of their fertilizer sales cycles. In the southern regions, fertilizers for economic crops are purchased based on actual needs. Therefore, the price of compound fertilizers is likely to remain relatively stable in the short term, as the supplies are still on their way and there are still orders from companies that have not been fulfilled yet. Maintaining stability is thus a sensible approach at this time. Secondly, raw material prices have declined, and with the rise in price of compound fertilizers, there are few new orders being placed. As is well known, during the pandemic, the price of compound fertilizers rose steadily after the Spring Festival, by around 50–100 yuan per ton; the increase was even greater for some lower-quality products. The factory price of 45-sulfur general-purpose fertilizers rose to over 2,300 yuan per ton. However, end-users were not willing to pay these increased prices. Currently, the wholesale price of 45-sulfur general-purpose fertilizers is around 2,500 yuan per ton, and this wholesale price does not reflect the increase in cost. As a result, it is difficult for companies to get their new prices accepted by customers. In particular, recent declines have been noticeable in the prices of urea and monoammonium compounds. Currently, the ex-factory price of small-grained products in Shandong Province has dropped to around 1720–1760 yuan per ton, a decrease of 50–80 yuan per ton compared to earlier levels. As a result, there are fewer new orders for compound fertilizers following these price increases. Once again, what will be the future of the fertilizer market in the summer? This year, there has been a clear trend of a surge in demand for compound fertilizers, with demand rising simultaneously across the country. Coupled with shortages of raw materials, this has led to temporary price increases. However, in some areas, the use of fertilizers for rice planting will not start until after May, leaving two months left. So, is there still potential for price increases in the demand for compound fertilizers during the summer? Based on the current trends in raw material prices, it is unlikely that the price of summer fertilizers will rise significantly. Over the years, compound fertilizers have been sold in large quantities at low prices starting in May and June; this year, however, special circumstances have led to unusual market conditions. Once things return to normal, it is unlikely that such extreme price fluctuations will occur again. Finally, as the pandemic comes to an end and people’s lives gradually return to normal, the market for fertilizers will also gradually become more rational. Unless there are any major special circumstances, the market for compound fertilizers is likely to decline after April.