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The optimal time to purchase ammonium phosphate is now. Author/Source: China Fertilizer Network. Date: July 3, 2020. Click-through rate: 5. After the peak demand for topdressing, the fertilizer market has returned to apparent calm. Although urea prices saw a slight uptick following the Dragon Boat Festival, due to short-lived regional demand and continuously declining prices in neighboring regions, the price increases in areas such as Shandong and the two rivers region did not last long. Currently, the prevailing ex-factory prices for urea in Shandong are 1,580–1,600 yuan per ton; in Linyi, the purchasing price stands at 1,640–1,660 yuan per ton. At present, the fertilizer market is in the late summer period, with the autumn fertilizer season yet to begin. Logically, prices of major fertilizer types should be trending downward; however, ammonium phosphate prices have defied this trend, showing signs of overall increase. In Hubei, the prevailing ex-factory price for 55% powdered ammonium phosphate has risen to around 1,850 yuan per ton, while in the Southwest region it is approximately 1,800 yuan per ton； The price of diammonium phosphate has seen further increases. Currently, the mainstream ex-factory price for 64% diammonium phosphate in Hubei is between 2150 and 2200 yuan, while the premium price for this product when it arrives in the North China region from the southwest also rises to around 2450 yuan. A discount of about 50 yuan can be negotiated on these prices. Autumn is the peak season for high-phosphorus fertilizers, and there is increased attention to phosphorus fertilizers within the industry. Although some industry players are not quite satisfied with the current prices and prefer to wait and see, others believe that, considering only the autumn market, the current time might represent a good opportunity to purchase phosphatic ammonium fertilizers. The main arguments in favor of this view are as follows: First, the overall production capacity of phosphatic ammonium fertilizers remains relatively low. Affected by the pandemic this year, overall production of phosphatic ammonium has declined significantly compared to the same period last year. According to rough estimates from China Fertilizer Network, in the first half of 2020, the average monthly production of monoammonium phosphate was over 900,000 tons, while that of diammonium phosphate was around 1 million tons. Recently, the operating rate of a large diammonium phosphate manufacturer in Hunan is only about 40%, and there are no plans for an increase in production in the short term. Although some factories have added new production facilities, resulting in a slight increase in capacity, overall, the production pressure related to phosphatic ammonium this year is lower than in previous years at the same time period. At present, most factories do not face storage issues; in fact, a large number of diammonium phosphate manufacturers have orders ready for export until August. Over the next month, phosphatic ammonium producers will be in a relatively advantageous position. Secondly, there is still room for negotiation in procurement at the current stage. In terms of timing, we are currently in the early stage of purchasing compound fertilizers for the autumn season; raw material procurement is not yet at a stage aimed at securing the lowest prices. However, there are already signs of price increases for monoammonium phosphate. Some compound fertilizer manufacturers have begun to hold ordering meetings for autumn-use fertilizers. Given this situation, large-scale purchases of compound fertilizers are likely to take place in the near future. At present, phosphate-ammonium fertilizer manufacturers operate at a relatively low level, resulting in less sales pressure, which may give them more leverage in the future. Some of these manufacturers might offer discounts or other favorable terms due to sales pressure in the near term. But within another half month to a month, most compound fertilizers will enter the peak purchasing period, and by then the balance of power between buyers and sellers could change. Price is less important at that point; the ability to supply the products will be a key issue. Finally, there are no signs of a significant drop in prices. One of the main reasons why some companies are still waiting to see what will happen is whether the price of phosphatic ammonium will continue to drop. At present, there is not much pressure on storage for monoammonium phosphate, and the export prices of diammonium phosphate are not significantly different from the local production costs and domestic prices. Additionally, given that phosphatic ammonium producers are currently operating at low capacity, the likelihood of a significant drop in its price in the future is not very high. In summary, although the phosphate fertilizer market is currently in a relatively low-demand period, given the current factors, there is no likelihood of price drops. For purchases driven by essential needs, negotiations with companies can be carried out; if risks are a concern, purchases can also be made in appropriate quantities.