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Urea prices are rising sharply; will monoammonium follow? _Author/Source: China Fertilizer Network Date: 2020-08-13 Clicks: 9 The urea market has been quite active recently; the industry’s focus is currently on printing labels. Some manufacturers are offering high prices for their products. However, it has been reported that restrictions on the quantity of urea that can be shipped have been introduced recently. With the labeling details not yet fully announced and companies facing difficulties in gathering their goods at the ports, urea prices have risen too rapidly, resulting in a decrease in demand from businesses. As a result, supply pressures on these companies have increased. If no positive factors emerge, urea prices may decline. However, influenced by the market atmosphere, urea prices are likely to remain high and continue to rise in the coming days. So what’s behind the recent increase in the price of monoammonium? At the beginning of the week, the ex-plant price of 55% ammonium sulfate produced by large manufacturers in Sichuan dropped, but it soon started to rise back to its previous level, at 1800 yuan per ton. It is reported that this increase in prices is mainly due to an increase in orders awaiting fulfillment by these companies; these orders can be fulfilled through early to mid-September, which is why the prices have begun to rise gradually ； Many enterprises in Yunnan have also suspended offering quotes, with production mainly on hold; a few smaller factories that ceased operations are expected to resume production by the end of the month. Having already used up their existing inventory, these factories intend to raise their quotes after resuming production. The initial export price for 55% ammonium sulfate was only 1,700 yuan, and these prices did not increase when the price of ammonium nitrate rose earlier. Therefore, the rise in the price of monoammonium in the southwest region is also understandable. So, what is the overall situation for monoammonium? Overall, the prices of ammonium sulfate across the country remain relatively stable, but actual transaction prices have seen a slight decrease, ranging from 10 to 50 yuan. It is reported that 55% ammonium sulfate powder produced by a major factory in Hubei, delivered to Wuxi in Jiangsu, costs 1900 yuan; the price at the time of production was also 1900 yuan. The acceptance and warehousing price of 55% ammonium sulfate in Hubei and Shandong is around 1,950–1,970 yuan. In Hubei, the actual acceptance price for 58% ammonium sulfate at the factory is between 1,930 and 1,950 yuan; for some high-quality grades, it was above 2,000 yuan in the early period, but it has now dropped to 1,970 yuan. It seems that it’s difficult to raise the price of monoammonium, while price cuts are indeed a reality. So why does this happen? At present, the pending orders of ammonium sulfate producers can generally be fulfilled by late August or at the end of the month; only a few can be completed around mid-September. Recently, producers have been focusing on fulfilling existing orders, and new orders are not being closed as smoothly as before, which means that the backlog of pending orders is being reduced quickly. Although there is no significant inventory pressure for these companies in the short term, in the long run, if demand fails to keep up, the pressure on them will gradually increase. Recently, there has been no significant improvement in the demand for ammonium nitrate. Companies across various regions have turned their attention to the winter storage market in the Northeast. It is reported that the price of 55% powdered ammonium nitrate upon arrival in the Northeast is around 1,960 yuan, but this figure is still about 50 yuan higher than the target price set by large traders. As a result, some companies and traders in the Northeast are still waiting to see what happens. It is also said that local companies in Liaoning offer a factory price of only 1,700 yuan for 55% powdered ammonium nitrate, with a slightly higher price at the point of sale. If such deals are made on a large scale and are genuine, it will undoubtedly have an impact on companies from other provinces dealing in ammonium nitrate. Furthermore, recently some compound fertilizer manufacturers have set relatively low prices for winter storage compound fertilizers in the Northeast, which has also posed certain obstacles to the market situation for ammonium nitrogen fertilizers. Fertilizer companies in Shandong and other regions have little interest in purchasing ammonium nitrate at the moment; they are instead waiting for the ammonium nitrate that was purchased earlier to arrive at their plants. Coupled with a lack of confidence in ammonium nitrate prices, believing that they will fall, these companies remain cautious, resulting in low demand in the short term. The situation regarding raw sulfur has not improved; currently, the stock levels in ports are around 3 million tons, with about 1.78 million tons stored at the Yangtze River port. The price of granular sulfur at ports remains around 600-650 yuan, and there is little possibility of a significant increase in the short term; as a result, it cannot provide much support for the cost of ammonium sulfate. In summary, the increase in the price of monoammonium phosphate is a phenomenon limited to certain areas; in places such as Hubei, the price of this compound has already seen a slight decline. It is expected that its price will continue to fall in the short term. (Zhao Hongye)