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Downward trend fully in effect – what will the market do in April? Author/Source: China Fertilizer Network Date: 2020-04-02 Clicks: 36 Recently, the prices of ammonium nitrate have started to drop significantly. Some manufacturers in Yunnan, Sichuan, Anhui, Henan and other regions have already reduced their ex-factory prices for this product. Although manufacturers in Hubei have either suspended providing quotes or maintained the previous prices, feedback from downstream customers indicates that some of them have indeed lowered their prices. Currently, the mainstream ex-factory price for 55% powdered ammonium nitrate in Hubei is between 1900–1950 yuan per ton; the actual price at delivery is between 1850–1930 yuan. High-end products are gradually disappearing from the market. The ex-factory price of 55% powdered ammonium nitrate produced by large manufacturers in Sichuan has been reduced for two consecutive weeks, reaching only 1800 yuan. It is reported that the actual price when this product arrives in Shandong is around 1940–1950 yuan, while it is said that the price in Shandong for 55% powdered ammonium nitrate from Hubei has also dropped to around 2000 yuan. As can be seen from the above, a downward trend for ammonium has fully begun; so what will be the market situation in April? On the demand side. It is reported that after producing the spring fertilizers, compound fertilizer manufacturers proceed straight to producing summer fertilizers, with little interruption in production. The special circumstances this year have resulted in a market situation different from previous years. It is said that so far, the sales performance of compound fertilizer manufacturers has been relatively good; following the intense purchasing activity in February and March, some of these manufacturers have sufficient stock of ammonium nitrogen fertilizers. There are still some orders from earlier periods arriving at the factories, while new purchases have slowed down recently. Although there is some demand for purchases in April, it is expected that compound fertilizer manufacturers will not be in a hurry to buy, so there should not be a surge in purchases. As ammonium nitrogen fertilizer plants set new prices, compound fertilizer manufacturers will purchase in appropriate amounts based on their own circumstances. On the supply side. As of the end of March, the average operating rate for ammonium sulfate production across the country was 43.10%, up by 7.9 percentage points from the end of the previous month. The operating rate of enterprises in Hubei saw a significant increase, and it is now close to 50%; earlier on, it was less than 30%. As the operating rate gradually increases and supply rises, the pending orders of ammonium sulfate manufacturers in regions such as Hubei can be fulfilled until around mid-April; at the latest, by the end of April or early May, these pending orders will start to decrease and shipments will become smoother. For now, these companies do not face significant inventory pressure, but there are few new orders being placed. Some smaller manufacturers say that their inventory of 55% ammonium sulfate powder is expected to exceed 10,000 tons by early May. Regarding raw materials. The sulfur market was in a favorable mood upon its recovery after the pandemic, but recent international trends have been unfavorable, with import sulfur prices continuing to fall. Currently, the price of granular sulfur at ports such as the Yangtze River port has dropped to 630 yuan, approaching the lowest levels seen before the Spring Festival. The prices of Puguang sulfur at the Wanzhou port and the Dazhou plant have remained stable at 700 yuan and 630 yuan respectively for two consecutive weeks. Given that the inventory of sulfur at ports remains high, at around 3 million tons, it is unlikely that sulfur prices will see a significant increase in the short term. In summary, there are relatively many negative factors affecting monoammonium phosphate, but there should be some demand in April, though the volume is likely to be low. It is expected that the price of monoammonium phosphate will drop significantly, but not by a large margin; specific attention should be paid to factors such as demand for compound fertilizers in the downstream market. (Zhao Hongye)