Caution is needed regarding rising urea prices; monoammonium phosphate can’t keep up

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Caution is needed regarding rising urea prices; monoammonium phosphate can’t keep up. Author/Source: China Fertilizer Network Date: 2020-08-06 Clicks: 9 The urea market has been positive recently, with prices continuing to rise. Since the weekend, the ex-factory prices of some urea producers in Shandong, the Two Rivers region, Shanxi and other areas have increased by over 100 yuan per ton. India’s renewed tenders have further pushed up urea prices. Although purchase prices in key regions have risen, overall transaction volume remains moderate. It is reported that large compound fertilizer manufacturers in Shandong have purchased thousands of tons of urea to stock up, but most companies and traders remain cautious, unwilling to accept high prices for urea; they prefer to replenish their stocks only as needed. Currently, compound fertilizer manufacturers in Linyi, Shandong, are paying 1730–1740 yuan per ton for urea, and prices may continue to rise. However, one should be vigilant regarding information coming from India and the market, as there are elements of speculation behind these price increases. It is best to proceed with caution. 　　As a result, manufacturers of monoammonium nitrogen face difficulties in keeping up with rising urea prices. Although autumn is the peak season for monoammonium nitrogen, compound fertilizer companies have already purchased some of it in advance; there is currently no strong demand for more of this product, so there is no urgency to make new purchases. It is reported that companies are focusing on getting the monoammonium nitrogen they purchased earlier delivered to their facilities, with little interest in making new orders. Moreover, compound fertilizer companies are not willing to pay high prices for monoammonium nitrogen at present; they lack confidence in its price and believe there is a risk of a price drop. Therefore, their purchasing attitude is cautious. Currently, the price of monoammonium nitrogen in Hubei remains high – 58% powdered monoammonium nitrogen is sold at 1930–1970 yuan per ton when paid upon delivery. It is also reported that 58% powdered monoammonium nitrogen purchased by large compound fertilizer manufacturers in Shandong costs 2070 yuan per ton when paid in cash at delivery. In other regions, such as the large factories in Sichuan, 55% ammonium sulfate had an initial selling price of 1750 yuan per unit; the quoted price was 1800 yuan. Currently, the selling price has been adjusted to 1750 yuan, meaning there has been a decrease in price. 　　Although factory suppliers still hold a certain advantage at present, as pending orders gradually decrease and no new orders have emerged yet, the advantage of these ammonia producers has diminished. At the moment, most of these companies’ pending orders can be fulfilled by mid-to-late August, with only a few able to meet orders until the end of September. If new order volumes do not increase, inventory levels will gradually build up. However, in the short term, these companies do not face any inventory pressures, and shipments proceed smoothly. In the future, they can adjust their production levels and switch to manufacturing other products according to changes in demand. In the short term, ammonia producers in Hubei, the main production region, are unlikely to make significant changes to their prices; they will likely maintain stable prices. Industry forecasts suggest that there might be another wave of demand in the near future, but it is not expected to be substantial. 　　The price of raw sulfur remains relatively weak, although there is still a strong tendency to maintain high prices in the local market recently. At present, the price of granular sulfur at the Yangtze River port has dropped and is now gradually recovering to around 635 yuan. The prices at the Puguang Wanzhou port and the Dazhou plant remain stable at 670 yuan and 600 yuan respectively for this week. Changes of several dozen yuan in sulfur prices are not enough to affect the price of ammonium sulfate; however, given the unfavorable supply and demand situation, poor conditions for raw materials can also pose obstacles to the price of ammonium sulfate. In the short term, the situation regarding sulfur prices is unlikely to improve significantly, especially considering issues such as high inventory levels at ports. 　　In summary, the positive factors for monoammonium nitrate have diminished recently, while negative factors have increased slightly; it is expected that prices for monoammonium nitrate will remain stable in the short term, or there may be a slight decline. 　　(Zhao Hongye)