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The situation for monoammonium and diammonium fertilizers is improving – is there a chance of price increases for autumn fertilizers? Author/Source: China Fertilizer Network Date: 2020-06-22 Clicks: 46 In mid-June, the fertilizer market entered a period of low demand during the summer and autumn seasons. Demand for summer fertilizers was gradually declining, and many compound fertilizer manufacturers reduced their production activities. They purchased some wheat-based fertilizer raw materials to prepare for the production of autumn fertilizers. Some of these manufacturers planned to establish pricing policies for wheat-based fertilizers by the end of June or early July. Therefore, recent changes in raw material prices have a direct impact on the future price trends of wheat-based fertilizers. First, urea prices have been declining slowly, but international prices provide significant support. This week, urea prices continued to decline, but the extent of the drop was modest. The main reason for this is that the demand for fertilizer application in the market has entered a low season; compound fertilizer manufacturers have already completed part of their purchases. Currently, the average ex-factory price for small-grained urea in the Shandong Lianghe region is around 1,640–1,660 yuan per ton. Urea production facilities remain operating at a stable level, with a daily production volume of around 147,000 tons. Although the production level is not high, there is still pressure on manufacturers’ inventories. As a result, domestic urea prices have dropped. However, international urea prices have been rising steadily recently, and with the results of India’s bidding process upcoming, it is likely that urea prices will change in the future. Secondly, the situation for monoammonium and diammonium is good, but what is the actual situation? The price of sulfur, the raw material for monoammonium phosphate, continues to rise. There is still demand for purchases by compound fertilizer manufacturers in the future, so the price trend for monoammonium phosphate remains positive. In Hubei province, the price of 55% powdered monoammonium phosphate is around 1800–1850 yuan per ton; actual transaction prices can be negotiated. However, most monoammonium phosphate manufacturers are currently fulfilling orders placed at lower prices earlier on ； The domestic market for diammonium fertilizers sees limited sales; it is mainly found abroad, where the export situation is good and prices are relatively high. In particular, since diammonium fertilizer manufacturers have low inventory levels, prices are expected to rise. Once again, there was a deliberate slight increase in potassium fertilizer prices locally, but the downstream sector did not accept it. Port prices for potassium chloride remain stable and stagnant; some importers have indicated an intention to raise prices slightly, but downstream buyers are not willing to accept this for now. Following the signing of the large-scale contract, potassium fertilizer prices dropped sharply. The initial price of 62% calcium chloride in the border trade areas fell to around 1,550 yuan per ton; various parties began to place orders, and prices in this sector soon started to rise, reaching around 1,600–1,650 yuan per ton at present, with supply becoming relatively scarce. Affected by the slow delivery speeds, the sales of potassium fertilizers at ports are also under pressure; some importers intend to raise prices slightly, but downstream buyers do not seem to accept this. Next, what needs attention is the introduction of price policies for wheat fertilizers in the autumn. As a competitor to these autumn fertilizers, diammonium phosphate may have a positive impact on their market prices if its cost continues to rise. However, based on the current situation of raw material prices, it is expected that autumn fertilizers will see a decline compared to summer fertilizers from the first half of the year. In the short term, there is little likelihood of price increases, while a price drop is quite likely. By the end of June and early July, the prices of wheat fertilizers will become clearer, and it will then become apparent just how much they will drop.