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The price of monoammonium has risen – is the market in panic? Author/Source: China Fertilizer Network Date: 2020-05-21 Clicks: 4 Recently, it was reported that some large manufacturers in Hubei have received orders for tens of thousands of tons of fertilizer to be delivered by mid-to-early June. With no current inventory pressure, these companies have raised their prices slightly on a tentative basis. Currently, the price of 55% powdered ammonium sulfate supplied by a major manufacturer in Shandong is 1,850 yuan per ton, up slightly from the previous range of 1,820–1,830 yuan. The price after this increase corresponds to approximately 1,750 yuan when considering the ex-factory price. It is also reported that another major manufacturer’s ex-factory price for 58% powdered ammonium sulfate is at least 1,900 yuan per ton. The author has learned that the quotes offered by other companies remain relatively stable for now; some companies still do not provide quotes and settle prices on a case-by-case basis. At present, the actual ex-plant price of 55% ammonium sulfate across the country is between 1,700 and 1,800 yuan, but due to transportation distances, prices at downstream factories vary, resulting in a relatively chaotic market situation recently. Is the market panicking? Not for now. As the author has learned, some large companies have received a large number of orders this time, and these orders are mainly related to composite fertilizer manufacturers with whom they cooperate. After receiving these orders, these large companies have many orders pending shipment, so there is no significant pressure on inventory at the moment. Moreover, new orders at lower prices are being placed slowly; perhaps it would be wise to consider raising prices tentatively? The quotes from other ammonium phosphate producers remain relatively stable for now; most of these companies still have orders that need to be fulfilled by the end of May. In some regions, some of the ammonium phosphate produced is used in the manufacture of compound fertilizers by those same companies, so there is little pressure related to inventory levels at present. However, the overall operating rate of ammonium nitrate production remains high. Most enterprises in Hubei have no plans for maintenance work at present. Although enterprises in Henan, Sichuan and other regions are carrying out maintenance on their facilities to varying degrees, this has little impact on the overall operating rate of ammonium nitrate production. In the future, it will be necessary to pay attention to whether there are any significant changes in the operating rates of ammonium nitrate production enterprises in Hubei. It can be seen that although there is little pressure on inventory from the supply side, it will still be necessary to pay attention to factors such as the operating rates of ammonium sulfate manufacturers and new order volumes in the future. As mentioned above, the orders from these major companies are directed only at those large manufacturers of compound fertilizers that cooperate with them. So far, there is no sign that other compound fertilizer manufacturers have increased their purchasing activity. Due to the unfavorable market conditions for high-nitrogen fertilizers, most of these manufacturers still face sales pressures, and sales volumes have slowed down. Some companies have plans to carry out maintenance on certain production facilities in the future; those that originally planned to purchase ammonium nitrate are now saying that such purchases might be delayed from mid-to-late May to after June. In the short term, it is unlikely that compound fertilizer manufacturers will make large-scale purchases; they will only replenish their stock in appropriate amounts when prices or policies are favorable. However, autumn remains the main market for monoammonium, and the industry still holds some confidence in the demand for it during this season. Although the price of monoammonium phosphate has dropped by 150–200 yuan since the Spring Festival, there is still a certain profit margin available for it. According to rough estimates from China Fertilizer Network, the total cost of high-quality 55% powdered ammonium phosphate in Hubei is around 1600 yuan. The atmosphere in the port sulfur market is positive, with electronic trading prices rising steadily; today’s peak reached nearly 700 yuan. After a sharp increase, port sulfur prices have seen slight adjustments. Currently, the prices of granular sulfur at ports such as the Yangtze River Port and Fangcheng Port are fluctuating around 645 yuan. This week, the price of sulfur produced by Puguang also increased as expected, with prices at the Wanzhou Port and Dazhou plant rising to 630 yuan and 530 yuan respectively. However, given the existing stock levels at high-port facilities, the industry believes that sulfur prices are unlikely to see significant increases in the short term. Moreover, in terms of total cost, prices for monoammonium still have room to fall. In summary, this increase in prices is only a minor one on a limited scale; most other companies have no intention of raising their prices at the moment. The key factor remains the balance between demand and supply. In the short term, demand for ammonium nitrate in the autumn has not yet become significant, and in recent years, compound fertilizer manufacturers have tended to adopt a gradual approach to their purchasing decisions. Therefore, overall prices for ammonium nitrate should remain stable, with no real increase expected in the short term. (Zhao Hongye)