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The surge in urea prices comes to an end – is monoammonium still viable? Author/Source: China Fertilizer Network Date: 2020-07-06 Clicks: 7 Recently, the pricing of urea by manufacturers in Shandong and other regions has risen. The application of fertilizers in agricultural markets in the Central Plains region has begun, which has reduced the sales pressure on urea manufacturers. However, the demand for agricultural fertilizers is expected to be short-lived, and since some factories are set to resume production soon, supply pressures may still exist in the future. It is anticipated that this increase in prices will come to an end, and the areas where urea prices drop will expand. Currently, compound fertilizer manufacturers in Linyi are purchasing urea at a price of 1630–1650 yuan per ton (the same unit applies below). The surge in urea prices is over – what’s the situation with monoammonium? This Monday, demand for ammonium nitrate slowed down slightly. Companies kept their prices stable after raising them, with a few firms that had not increased their prices earlier following suit. Currently, the mainstream ex-factory price for 55% powdered ammonium nitrate in Hubei is between 1850 and 1900 yuan, while the actual price at delivery is around 1800–1850 yuan. The ex-factory prices for 58% and 60% powdered ammonium nitrate in Hubei are approximately 1980–2000 yuan and 2100 yuan respectively. Large manufacturers in Sichuan saw the price of 55% powdered ammonium nitrate rise to 1850 yuan earlier on; however, as most transactions have been small-scale recently, the price has dropped to 1800 yuan, with discounts possible for larger orders. Demand for monoammonium has slowed slightly. According to large compound fertilizer manufacturers in Shandong, the demand for ammonium sulfate as a raw material is expected to reach around 40,000 tons by October. There are currently 10,000 tons of orders for ammonium sulfate that are pending delivery and have not yet arrived at the factories; about 10,000 tons of ammonium sulfate has already arrived at the warehouses. Due to the high prices of ammonium sulfate, especially in Hubei, these companies believe that its price has reached a relatively high level, and it is likely to decline in the coming months. As a result, purchasing activities have slowed down in the short term, and no new procurement plans have been formulated yet. Recently, the purchasing activity of many compound fertilizer companies has slowed down temporarily; only some smaller and medium-sized compound fertilizer manufacturers still have intentions to make new purchases. It is expected that overall demand in the monoammonium market will remain low in the short term. However, the author believes that there is no need for panic at the moment. Although many large companies in Hubei initially refused to give quotes or take on new orders, focusing instead on fulfilling existing orders, in reality these companies have quietly started accepting new orders recently. Some companies that had stopped production have resumed operations and, rather than setting new prices, have chosen to suspend taking on new orders while still working on existing ones. It is reported that some companies in Hubei can fulfill their pending orders until around mid-August, with others able to do so until the end of August. Apart from the Hubei region, sales performance for most other companies is also satisfactory. The overall operating rate of ammonium nitrate production enterprises remains below 40%; the operating rate of large factories in Sichuan at 55% for powdered ammonium nitrate is still low. Some ammonium nitrate production enterprises in Hebei have export orders, while large factories in Anhui have maintained stable pricing and are focusing on controlling the number of orders accepted. Enterprises in Henan use some of their production for internal use and send some to external markets, with little inventory available. Overall, the overall supply pressure for monoammonium is not high at present, and most companies do not face inventory pressures. Regarding raw materials, they have little impact on the price of monoammonium. Although the sulfur market has been somewhat sluggish recently, the overall situation remains satisfactory. Stock levels in ports are gradually declining; currently, the price of granular sulfur at the Yangtze River Port and Fangchenggang Port has dropped to 650 yuan per ton. The prices of sulfur at the Puguang Wanzhou Port and Dazhou plant areas have remained stable for three consecutive weeks at 690 yuan and 590 yuan respectively. In summary, the price increase for urea is now over; ammonium nitrate still has a role to play. There is still demand for it in the future, and companies that produce ammonium nitrate will have enough orders to cover their needs for some time, with no pressure related to inventory levels. It is expected that prices of ammonium nitrate will remain stable with slight increases in the short term, and transactions will generally stay at elevated levels after these increases. (Zhao Hongye)