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Urea prices start to drop, while monoammonium urea remains stable. Author/Source: China Fertilizer Network. Date: 2020-07-10. Clicks: 5. The agricultural demand for urea in some regions has come to an end; although there is still industrial demand in places like Shandong, it is currently at a moderate level. The resumption of production by several large urea manufacturers in recent days has increased supply, but at present the flow of urea is limited. In the future, supply in these local markets is expected to increase gradually. Therefore, it is unlikely that prices in Shandong, the Two Rivers region and other places will rise any further. Currently, compound fertilizer manufacturers in Linyi, Shandong, are purchasing urena at a price of 1640–1650 yuan per ton (the same unit applies below). Prices of urea in the Northeast region have declined; currently, the mainstream ex-factory price in Liaoning is 1590–1610 yuan, while in Heilongjiang it is around 1620 yuan. Although prices have dropped, new orders are still not performing well due to weak market demand, and further declines are likely in the future. With the drop in urea prices, what’s the situation with monoammonium? There was little activity in the ammonium market this Monday; demand slowed down slightly, and companies generally maintained stable pricing. Currently, the prevailing ex-plant price for 55% powdered ammonium in Hubei is between 1850 and 1900 yuan, while the actual price at which it is delivered is around 1800–1850 yuan. The prevailing ex-plant prices for 58% and 60% powdered ammonium in Hubei are around 1980–2000 yuan and 2100 yuan respectively. Large manufacturers in Sichuan offer 55% powdered ammonium at around 1800 yuan per unit. After all, autumn is the peak season for monoammonium phosphate, and compound fertilizers require a large amount of this raw material. Although demand was released ahead of schedule this year, there is still demand to come. However, due to the existing inventory of monoammonium nitrate and the amount ready for shipment in compound fertilizer manufacturers, production can be sustained for some time; as a result, demand has slowed down slightly, and these companies have adopted a wait-and-see attitude for now. At present, most compound fertilizer manufacturers have announced their pricing policies for autumn fertilizers, but only a few of them are seeing satisfactory collection rates; most are collecting very little money. Distributors believe that there is still room for decline in the prices of compound fertilizers. Coupled with falling urea prices, and since it is still early before the actual time when fertilizers will be needed in October, there are many uncertainties surrounding compound fertilizers, which has led to low enthusiasm among distributors to make purchases for now. It is thus understandable why compound fertilizer companies hold such an attitude toward monoammonium fertilizers. Although new orders have slowed down slightly recently, the pressure on ammonium sulfate manufacturers is not high at present. This is especially true for manufacturers in Hubei, who have limited inventory and can ship products smoothly; the orders awaiting shipment can be fulfilled by mid-August or at the end of August. Sales performance is also relatively good in other regions. The overall operating rate of ammonium sulfate manufacturers remains around 40%. Some manufacturers in Hubei, Yunnan, Anhui, Hebei, and other places have export orders to handle, while some have not returned to full capacity. Some production facilities have switched to producing other types of ammonium sulfate, diammonium sulfate, or compound fertilizers. As a result, the overall supply pressure in the domestic market is not high, and most manufacturers do not have excess inventory. It is reported that traders also have limited inventory of ammonium sulfate this year; in other words, there is not much ammonium sulfate available at low prices, so this should not have a significant impact on the ammonium sulfate market in the future. Recently, the market for raw material sulfur has been relatively sluggish, with inventory levels in ports fluctuating. As of last Friday, the total sulfur inventory in ports was 3.04 million tons, while that in the Yangtze River ports was 1.8 million tons, showing a slight increase compared to earlier periods. The recent appreciation of the RMB has also had an impact on the sulfur market. At present, the price of granular sulfur in the Yangtze River ports and Fangchenggang port has dropped to 640 yuan. The prices of sulfur at the Puguang Wanzhou port and Dazhou plant areas have, after remaining stable for three consecutive weeks, fallen to 660 yuan and 580 yuan respectively this week. In summary, ammonium sulfate manufacturers are not under much pressure at present, and prices remain firm. Although demand has slowed slightly and the support provided by raw material prices is limited, there is still some solid demand in the future. It is expected that prices of ammonium sulfate will remain stable in the short term or may see a slight increase, with transactions staying relatively stable for now. Going forward, attention will be paid to the recovery in the operating rate of compound fertilizers and the sales of autumn fertilizers. (Zhao Hongye)