It rains heavily during the Qingming Festival; on the roads, the ammonium diammonium salts seem to lose their vitality

Thread Content

Rain falls heavily during the Qingming Festival; on the roads, the supply of diammonium phosphate seems to be running out. Author/Source: China Fertilizer Network Date: 2020-04-07 Clicks: 7 In the blink of an eye, the Qingming Festival has arrived, and the shipping processes at the factories are coming to an end, with supplies gradually decreasing. The retail phase in the northwest and northeast markets has gradually begun, but according to feedback from downstream distributors, wholesale prices of diammonium phosphate have declined to varying degrees in various regions recently; some industry insiders even suggest that these wholesale prices may drop further after April. 　　On the demand side, the domestic grassroots market is gradually becoming saturated, while international demand remains uncertain. Following the intense shipping activities in March, factory shipments are nearing completion; delivery rates to key diammonium phosphate markets such as the Northeast and Northwest have reached over 90%, effectively eliminating the stock shortages caused by the pandemic. Due to the poor market conditions for diammonium phosphate in the earlier period, the overall advance pricing was low; as a result, most of the diammonium phosphate that has arrived now is being sold at these low prices. In some areas where fertilizers were used earlier, retail sales have already begun, but individual distributors are lowering their wholesale prices in order to avoid inventory buildup. Currently, the wholesale price of 64% diammonium phosphate in Heilongjiang has dropped to 2500–2550 yuan per ton (the same unit is used below); in the northwest region, the wholesale price has fallen to 2400–2450 yuan per ton, while in Xinjiang it is around 2600 yuan per ton. The international diammonium phosphate market has seen weak trading activity due to the pandemic; key markets for this product, such as India and Pakistan, are under lockdowns and port closures. Moreover, the severe locust plagues in these countries make it difficult to predict future demand, and the capacity of ports to receive shipments is questionable. 　　On the supply side, domestic diammonium phosphate manufacturers are currently keeping their production levels high in order to capitalize on the remaining demand in the spring market. Although wholesale prices are continuing to decline, most of these companies already have enough orders to meet the spring sales demand, so there is little likelihood of a drop in production in the short term. Moreover, by mid-April, after completing the orders currently pending, companies will have time to handle the orders from the North China market and the international market. In addition, some factories will enter a period of rotational maintenance after operating at full capacity for an extended period of time. Therefore, in the short term, the situation of persistent oversupply of DAP is unlikely to improve. 　　There is insufficient cost support, and the overall market environment is poor. At present, the total stock of sulfur in our country exceeds 2.8 million tons, nearly double the level of the same period last year. Coupled with the sharp drop in crude oil prices, which has led to a significant reduction in the costs of ocean transportation, the sulfur market is in a favorable position due to scarcity; the price of granular sulfur at ports is around 620 yuan per ton. The price of liquid ammonia remains stable for now, but it is still at a low level overall; currently, the mainstream ex-plant price in Hubei region is 2600–2680 yuan. The domestic spring market has generally entered the retail phase, with supply shortages of various fertilizers becoming apparent. The daily production of urea has reached nearly 170,000 tons, and its price has dropped by around 100 yuan compared to earlier levels; once large-scale contracts for potash fertilizers are signed, prices will also fall accordingly. The domestic market is in the latter stage of the spring season, with reduced demand for various fertilizers, resulting in an overall weak market trend. 　　In summary, most futures sources are settled at low prices, the overall market condition for fertilizers is weak, and furthermore, in order to avoid inventory buildup, wholesale prices of diammonium phosphate have been declining gradually. On the factory side, in an effort to capture as many remaining orders from the spring market as possible, the operation of diammonium fertilizers will remain at a high level for some time. Demand in the summer market is low, with only a few transactions in the international market; factory prices are likely to decline in the future. 　　(Rong Guangwen)