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Urea prices start to fall at the end of summer; diammonium phosphate awaits the autumn market. Author/Source: China Fertilizer Network. Date: 2020-06-22. Clicks: 45. In late June, wheat harvesting in the Central Plains region was nearly complete, and the summer fertilizer market was also entering its final phase, with only occasional demands for replenishments remaining. Even urea, which had maintained strong prices for nearly a month, began to see a decline in price; the ex-factory price of urea in Shandong dropped to 1620–1640 yuan per ton (same unit applied below). As agricultural demand faded, pressure on companies increased gradually. Although the volume of sales of diammonium phosphate is lower in summer, overall prices remain stable. The ex-factory price for 64% diammonium phosphate in Hubei is between 2100 and 2200 yuan, with actual transaction prices around 2100 yuan. The delivery price for 57% diammonium phosphate from enterprises in the southwest to North China is 2100 yuan. Compared to the same period last year, when prices plummeted continuously after the end of the spring market, this year the prices of diammonium phosphate have remained relatively stable. The slow period in late summer and early autumn is also expected to be overcome thanks to favorable export conditions, as we wait for the arrival of the autumn market. Firstly, sales in the international market are performing well. This has been mentioned several times in the author’s previous articles, and those who follow the market trends for diammonium compounds are surely familiar with it. Today, let’s talk about the export of diammonium fertilizers in the coming months. Based on past experience, the period from June to October is the peak season for China’s export of diammonium phosphate. Taking the export data from the past five years as an example, the total volume of diammonium phosphate exported by China during these months ranges from 3.19 million to 4.65 million tons, accounting for 49.25% to 62.36% of the annual total. In terms of timing, these months coincide with the important transition period in the diammonium phosphate market as it moves from summer to autumn. Turning back to the present, China’s diammonium phosphate manufacturers are seeing strong export performance at the moment, with shipments from some companies set to take place as early as mid-August. Due to the impact of the global pandemic, the operation rates of diammonium phosphate production facilities in countries such as India are low, and their domestic inventories of diammonium phosphate are relatively low; as a result, demand is seen as positive by most industry experts. Secondly, raw material costs remain low. The inventory in Port of Sulfur remains at a high level of around 2.7 million tons. The price of granular sulfur at the Yangtze River port is 665 yuan, while the prices at Puguang Wanzhou Port and the Dazhou plant remain stable at 690 yuan and 590 yuan respectively. Although both the international market and electronic trading platforms are trying to push up prices, the excessively high inventory levels in domestic markets remain an unavoidable obstacle. Unless extreme conditions arise that significantly affect the supply of sulfur in the future, it is unlikely that sulfur prices will rise sharply in the short term. Although liquid ammonia prices experience fluctuations from time to time, they remain low overall this year due to constraints from downstream demand. The production costs of most diammonium companies are at their lowest levels in recent years; although domestic prices remain stagnant, factories still enjoy substantial profit margins. Once again, market competition is gradually intensifying. It is said that the sales of diammonium phosphate in the spring market this year have been good; some dealers claim to have sold off even the inventory from the year before last. However, apart from the fact that enterprises in Hubei were shut down for over a month due to the pandemic, another factor that cannot be ignored is the fact that the overall price of diammonium phosphate is about 500 yuan per ton lower than it was last spring. The lower price gives diammonium a certain advantage in competing with alternative products such as compound fertilizers. Currently, the prices of compound fertilizers are on the decline in the summer, while the situation for fertilizers in autumn remains uncertain. The diammonium phosphate market is stuck in a stalemate; it might be a good idea to wait and see what actions the compound fertilizer manufacturers take first. In summary, the demand in the autumn market is promising both domestically and internationally. However, due to weak cost support and an uncertain trend for compound fertilizers in autumn, prices of diammonium phosphate are likely to remain stagnant or see only a slight increase in the coming period. (Rong Guangwen)