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“How long can the “exceptionally good” quality of urea be maintained? Author/Source: China Fertilizer Network Date: April 20, 2020 Clicks: 16 Recently, apart from urea, most types of fertilizers in the fertilizer market have performed poorly. In the phosphate fertilizer market, diammonium phosphate is in a tricky situation where the spring sales period is coming to an end while the summer sales period has not yet begun. There are very few orders left for shipment during the spring season among manufacturers of diammonium phosphate. In some areas where fertilizers are used early on, the retail sales phase has basically ended, and dealers with large inventories are starting to sell at lower prices. Some factories that produce compound and blended fertilizers are also selling their raw materials at reduced prices. Wholesale prices in the market are quite chaotic. For example, in Heilongjiang Province, the wholesale price of 64% diammonium phosphate ranges from 2450–2550 yuan per ton; retail prices are around 2500–2700 yuan. In Hubei Province, the selling price of 64% diammonium phosphate based on the factory price is between 2120–2150 yuan. The market for monammonium phosphate remains sluggish, with some companies still refusing to provide prices and offering deals on a case-by-case basis. It is reported that the price of 55% ammonium phosphate in Hubei Province, as accepted by suppliers in Shandong, has dropped to 1900–1930 yuan, while smaller manufacturers offer it at just 1850 yuan. This means that the actual factory price of 55% ammonium phosphate in Hubei Province is around 1720–1800 yuan； The potassium fertilizer market is also facing difficulties in making purchases due to the pending large-scale contracts. Once such contracts are signed, the price of potassium fertilizers will drop sharply; however, if no contracts are signed, prices may continue to rise in the second half of the year due to shortages. Recently, the overall market situation for urea has been relatively good. At present, the standard ex-factory price of urea in Shandong is 1710–1730 yuan; compound fertilizer manufacturers in Linyi pay 1770–1780 yuan per unit of urea. In Hebei, the standard ex-factory price of urea is 1720 yuan, while in Henan it ranges from 1700–1720 yuan. In Shanxi, the standard ex-factory price is 1650 yuan, with larger particle sizes costing 1660–1670 yuan. In Inner Mongolia, the standard ex-factory price of urea has also risen to around 1510 yuan. However, considering the overall market conditions, it seems unlikely that this favorable situation for urea will persist for long. There are mainly the following points: First, the supply volume is on the high side. At the current stage, the daily physical production of urea across the country amounts to 163,000 tons. This year, some manufacturing plants still plan to increase their production capacity. According to data from China Fertilizer Network, whenever the daily urea production in the country exceeds 160,000 tons over the past two years, there has been a slight decline in the overall price of urea. Recently, aside from those plants that have temporarily stopped production, there are relatively few plants that are scheduled for maintenance, which means that the supply in the urea market will remain sufficient in the near term, thus exerting pressure on overall urea prices. Secondly, market demand has been relatively weak recently. Recently, the demand for spring fertilizers in some areas has essentially come to an end; at present, only certain regions such as the Northeast and Northwest still have a need for fertilizers. Although dealers have relatively low inventory levels, they prefer to wait until the market picks up before making purchases and storing supplies, rather than rushing into purchases and stockpiling. Against this sluggish backdrop, the overall sales of urea have been poor. Additionally, due to the impact of the pandemic, the market conditions for board manufacturers and melamine are also unfavorable, with industrial demand remaining weak and thus demand for urea being low as well. In summary, the overall performance of the urea market has been rather average recently. Although prices have seen a slight rebound in some regions, demand remains weak. Coupled with a relatively low supply level in the urea market, it is expected that prices of urea may show signs of decline in the near future. (Wu Wenchao)