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2,150 yuan – Can compound fertilizers remain unchanged in the face of all changes? Author/Source: China Fertilizer Network Date: 2020-04-13 Clicks: 7 In mid-April, the fertilizer market remained volatile, with urea prices seeing a rebound, which once again heightened tensions among downstream users. It’s similar to the current situation with the pandemic in China: although the situation was under control domestically, cases imported from abroad once again triggered anxiety among people. According to research by China Fertilizer Network, urea prices have seen a rise of 10–20 yuan per ton, but the overall market situation for compound fertilizers remains relatively stable; only a few companies are willing to negotiate prices. First, demand for compound fertilizers is nearing completion, but there is still room for growth. After April, the demand for spring fertilizers in the Northeast and North China regions is coming to an end. In particular, the need for top-dressing fertilizer for wheat in North China has already been met, while in Jilin and Liaoning in the Northeast, 80%-90% of the fertilizer needs for corn have been satisfied. However, there is still a small amount of remaining demand in Heilongjiang in the Northeast. Dealers in Harbin say that the consumption of chemical fertilizers this year is very slow; last year, farmers received most of their fertilizers by mid-April, but as of now this year, some still haven’t obtained their fertilizers and are waiting to see what happens. It is estimated that there will be occasional sales over the next half month. Although urea prices dropped significantly earlier on, most compound fertilizers are currently in a phase of tight supply, which is why their prices remained relatively stable last week. This week, urea prices rebounded unexpectedly; although many consider this rebound to be unfounded, it did affect the willingness of some end-users to stock up on fertilizers. With demand approaching in the northeastern regions, it has become necessary for them to purchase fertilizers now, so there is absolutely no need for a decrease in the prices of compound fertilizers at this time. Secondly, the operating rate of compound fertilizer manufacturers is continuously declining, with little inventory pressure. I recall that in March, the average operating rate of compound fertilizer manufacturers across the country rose above 70%, while after April it dropped to around 63%. On the one hand, demand in the Northeast region declined, and on the other hand, some companies voluntarily reduced their operating rates. Furthermore, most compound fertilizer manufacturers do not face significant inventory pressures; in fact, a few of them have no inventory at all. Under such circumstances, price adjustments hold little significance. Once again, the main reason for the decline in prices of mixed fertilizers in the Northeast is to clear inventory. As is well known, the demand in the Northeast region will come to an end in just over ten days. Fertilizer manufacturers in this region produce only once a year, and the surplus of raw materials and finished products creates cost pressures. Therefore, it is normal for the prices of blended fertilizers to rise while the prices of large-grain fertilizers and diammonium fertilizers fall. Given that there is little demand left in the Northeast, dealing with the remaining inventory is also a practice followed in previous years. Overall, the price trend for compound fertilizers remains relatively stable; currently, the standard factory price for 45-sulfur 12-18-15 fertilizers is around 2150 yuan per ton. Although raw material prices are highly variable, compound fertilizers manage to remain stable in the face of these changes. However, this is only true in the short term; in the long run, if there is no hope of a rebound in urea prices, the outlook for corn fertilizers during the summer remains unfavorable.