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Why is fertilizer being stocked so early? Author/Source: China Fertilizer Network Date: 2020-07-13 Clicks: 7 The sales of corn fertilizers have ended, while the market for wheat fertilizers has not yet fully developed; the fertilizer market is in a state of chaos, with urea prices fluctuating greatly, attracting a lot of attention in the market； Compound fertilizers are available at low prices, kicking off the autumn market; overall production levels continue to rise, with some distributors waiting until ordering events to make purchases ； The potassium fertilizer market is also consolidating at low levels; a price increase is only waiting for the right catalyst. But while everyone was focused on the fluctuations in urea prices and hesitating about whether to purchase compound fertilizers and potassium fertilizers, diammonium phosphate had already seen its price rise quietly. Currently, 64% of the mainstream ex-factory prices for diammonium phosphate in Hubei province have risen to 2150–2200 yuan per ton (the same unit is used throughout). The prices offered by companies in the southwest region for delivery to the North China market have even reached 2400–2450 yuan per ton, and these prices are likely to continue rising. Have you managed to take advantage of this price increase? Brothers who missed out should pay more attention to Zhongfei Network. First of all, everyone must be wondering why the price of diammonium has risen First, export conditions are favorable; most of China’s diammonium phosphate manufacturers have orders ready for shipment that can be fulfilled until the end of July. There is strong demand in the Indian market, and this positive trend in exports is expected to continue until the end of autumn. Secondly, both social inventory and factory inventory are at low levels. Due to favorable export conditions and the fact that some manufacturers underwent maintenance periods, the supply of diammonium phosphate in the domestic market was limited this summer. After the summer sales period, most distributors had exhausted their diammonium phosphate stocks, while factories only had a few thousand tons of inventory left. This start to autumn can be considered the best ever. Secondly, can the later-stage diammonium compound decrease? Firstly, India is both a factor for success and a factor for failure; as a major customer in the international phosphate fertilizer market, India’s import demands will undoubtedly have a significant impact on the offshore price of diammonium phosphate in our country as well as on its export trends. However, unforeseen events can arise, and border tensions between China and India have certainly cast a shadow over the export of diammonium phosphate from our country. With the recent appreciation of the RMB, coupled with rising prices as domestic demand picks up, some companies are less enthusiastic about exporting; new orders are not performing well, and they may shift their focus to the domestic market in the future. Secondly, the stock of sulfur at the port has exceeded 3 million tons, and the price of granular sulfur at the port has dropped to as low as 630 yuan; prices are expected to continue falling in the future, keeping the cost of diammonium sulfate at a very low level. Third, the pricing of fertilizer for autumn wheat is low, and the outlook for this market remains negative; if prices continue to fall, the diammonium phosphate market might be replaced. Finally, let’s talk separately about the 57% diammonium compound, which has been a source of controversy in the market recently. Recently, the arrival prices of 57% diammonium nitrogen in the North China market for some companies have risen to 2150 yuan, yet the downstream sector is not very receptive to this price level, resulting in slow sales. From the dealers’ perspective, during the summer market period, the mainstream wholesale price of 57% diammonium phosphate in North China was around 2000 yuan; even for 60% diammonium phosphate supplied by certain manufacturers, the price upon arrival at the dealers’ locations was only around 2100 yuan. When the prices for autumn were announced, there was a great deal of shock in the market. From the perspective of manufacturers, 57% of enterprises in Hubei Province are facing difficulties in producing diammonium phosphate, and some large companies in the southwest have also reduced their production of this compound by 57%. With the autumn market being a period when high-phosphorus fertilizers are in demand, there are undoubtedly conditions for an increase in the price of 57% diammonium phosphate. Pricing will ultimately have to be tested by the market. It remains to be seen whether production of 57% diammonium will remain at low levels in the future, and downstream distributors should proceed with caution when making purchases in the near term. In summary, the autumn market for diammonium phosphate has already begun, with some distributors having completed their first batches of purchases. Although there is a lot of speculation in the market at present, those who purchased goods at these low prices will not face much sales pressure in the future. The next opportunity to acquire diammonium phosphate will depend on export conditions in August. (Rong Guangwen)