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Half of the autumn sales period has passed; diammonium fertilizers remain in strong demand _ Author/Source: China Fertilizer Network Date: 2020-08-31 Clicks: 48 As we approach the end of August, the autumn rains bring a touch of coolness, and they also signal that the fertilizer market is entering its peak shipping period, with downstream distributors showing increased enthusiasm for purchasing goods. However, with recent fluctuations in the fertilizer market, the already chaotic autumn market has become even more turbulent. Urea prices have seen significant swings, there are constant reports of rising prices for potassium fertilizers, compound fertilizers are showing signs of activity, monoammonium fertilizers are holding steady awaiting market developments, while diammonium fertilizers continue to maintain their strong performance. Currently, the mainstream ex-factory price for 64% ammonium diammonium phosphate in factories in Hubei is between 2200–2300 yuan per ton (the same unit applies below), while the mainstream delivery price at ports for 64% ammonium diammonium phosphate from large manufacturers in the southwest is between 2450–2520 yuan per ton. However, following this price increase, some different opinions have emerged in the downstream market: can the price of diammonium sulfate maintain such strength? Firstly, the export market is performing well. The international market is performing well at present, with steady demand from countries such as India and Southeast Asia. Recently, the offshore price of diammonium phosphate in China has risen to $335–340 per ton. When converted to the ex-factory price of this product for certain Hubei-based companies that have lower export costs, it amounts to 2,220–2,250 yuan per ton. This price is now on par with the domestic selling prices of some companies, which has prompted some of them to shift their focus to the international market and to limit new orders in the domestic market. According to investigations by China Fertilizer Network, some factories that were scheduled to ship shipments by the end of September have even stopped accepting new orders. Although there are still ongoing shipments of prior orders in the domestic autumn market, and there is no shortage of diammonium phosphate, most diammonium phosphate manufacturers face little sales pressure in this season; with relatively limited supply available, it is not surprising that prices remain firm or even continue to rise as demand increases. Secondly, the advantage of the domestic market cannot be underestimated. In autumn, wheat fertilizers have always been dominated by high-phosphorus fertilizers, and this year the performance of diammonium phosphate in the market has been particularly impressive. After the application of base fertilizer for summer corn, thanks to lower costs, diammonium phosphate was able to enter the autumn market at relatively low prices. This gave it a competitive advantage over compound fertilizers, and its prices continued to rise as export demand increased. Downstream large traders and agents have also gained confidence and started making bulk purchases; some factories even sold out almost all of their goods for the autumn market as early as July. The current market has shifted from factory sales to wholesale transactions among distributors. The spread of diammonium fertilizers is accelerating; although there are relatively few new orders from factories, given the large number of orders awaiting fulfillment and the need to support downstream agents, prices are likely to remain stable or rise in the future. Finally, demand for winter storage is positive. In the past, autumn markets would heat up in August and September, but by October, when actual sales and fertilizer use took place, a decline in activity would set in, with prices even dropping. However, the likelihood of such a situation occurring this year has been reduced to a minimum. The main reason is that the outbreak of the pandemic at the beginning of the year led to low levels of inventory in regions such as the Northeast and Northwest; many distributors even cleared out the inventory that had accumulated over previous years. The market is optimistic regarding the capacity to take in goods for winter storage this year. Additionally, according to our sources, there is not much export-ready goods left in China by September, and some factories’ production schedules have to be extended until October. Therefore, the likelihood of a decline in the prices of diammonium phosphate in October this year is low. In summary, driven by domestic and international demand, the diammonium market remains stable, with little likelihood of price cuts in the autumn. (Rong Guangwen)