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Too many fluctuations in urea prices; diammonium phosphate sees steady price increases. Author/Source: China Fertilizer Network. Date: 2020-08-24. Clicks: 6. At the beginning of this week, urea prices dropped sharply, with declines of up to 100 yuan per ton in some areas. Just when it seemed that urea prices would continue to fall, tenders in India brought hope once again, causing certain factories to stop the decline in prices. Urea prices remained volatile in early August, attracting much attention. Diammonium continues to show strong performance since the summer; some factories that had initially offered lower prices have gradually raised them. As shipments proceed, the market remains optimistic about it. So why is diammonium so strong? How long can they remain powerful? Firstly, the available supply is limited, resulting in less sales pressure on factories. The main reason for the strong rise in the prices of diammonium products is the large number of orders that companies have pending, which will need to be fulfilled by around mid-September; some factories have already started to limit new orders. Unlike in the past when they relied on production cuts to ease sales pressure, this year’s diammonium phosphate factories are in a much better position. With normal operations and driven by demand both domestically and internationally, these factories do not face any inventory issues; some even report that certain low-concentration diammonium phosphate products have been sold out. If in the earlier period most of the orders pending at factories were based on low prices, then since August the upward trend in the price of diammonium phosphate has continued, and companies continue to receive new orders; this shows that this strong rise in the price of diammonium phosphate is not unfounded. Secondly, export prices have been rising continuously, while domestic demand is booming. According to a survey by China Fertilizer Network, the FOB price for small shipments to Southeast Asia in our country is approaching 330 dollars, while the FOB price for large shipments to countries such as India and Pakistan is around 325 dollars. Due to the impact of the pandemic, international supplies of diammonium phosphate have decreased, and coupled with the recent peak season for fertilizer use, export prices and volumes of diammonium phosphate from China have risen. Domestically, the autumn market has entered the stage of factory shipments; sales of diammonium nitrogen fertilizer have been declining gradually, with agents and large traders beginning to sell their stock. Factories, facing limited available supplies, have started to control new orders, maintaining relatively firm pricing. As a result, wholesale prices in the market have begun to rise, in line with the factory outlet prices. Finally, raw material prices remained stable at low levels. Although the total stock of sulfur in ports remains around 3 million tons, with the Yangtze River ports holding 1.8 million tons as well, recent prices for granular sulfur at ports have risen to 665 yuan. Apart from the strong demand for phosphatic fertilizers in downstream industries, there are no other positive factors supporting sulfur prices. As a result, the sharp rise in diammonium phosphate has begun to drive up the prices of raw materials. The price of liquid ammonia has declined slightly recently; the delivery price of liquid ammonia at enterprises in Hubei is around 2,500–2,600 yuan, while ore prices remain relatively stable. In Hubei region, the full cost of 64% diammonium products at the high-end level is around 2,000 yuan, which means that both export sales and domestic sales enable these companies to remain profitable. In summary, the fluctuating prices of urea have kept everyone on edge, while diammonium phosphate has maintained its strong performance amid tight demand and supply conditions both domestically and internationally. With the market progressing in the autumn, there is still a possibility that diammonium phosphate prices will continue to rise in the future. (Rong Guangwen)