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Urea prices drop sharply; ammonium nitrate producers are cautious, hoping for stability _ Author/Source: China Fertilizer Network Date: 2020-09-10 Clicks: 8 Recently, the pricing of urea by manufacturers in Shandong, the Two Rivers region, Shanxi and other areas has continued to decline slightly. Currently, the average ex-factory price of urea in Shandong is 1640–1680 yuan per ton. In Linyi, compound fertilizer manufacturers are purchasing urea at 1660–1670 yuan per ton. Although there is still demand from ports, domestic market demand is moderate, and the overall demand isn’t sufficient to absorb the current production volume of these factories. As a result, there are relatively few new orders for urea. Both industrial and agricultural demand remains low. It is reported that the date when port loading restrictions will be lifted may be postponed, which suggests that urea prices could continue to fall in the short term. Urea has seen a \"blatant\" price drop – what about monoammonium? Recently, the price of monoammonium nitrate has remained relatively stable. Currently, the actual price at which 55% powdered monoammonium nitrate is delivered from factories in Hubei is between 1780 and 1800 yuan; some larger manufacturers are still charging 1820–1830 yuan. It is reported that some large manufacturers in Hubei have stopped taking orders, while the price for products shipped from Shandong is 1850 yuan ； In the southwest region, the actual export price of 55% ammonium sulfate ranges from 1650 to 1750 yuan per unit ； In Henan, the actual acceptance price at factory for 55% ammonium sulfate is between 1,780 and 1,820 yuan; for high-end products, transactions are usually made on a small-scale basis with corresponding prices. Urea has seen a justified price drop; why is diammonium phosphate stable at present? The author’s analysis is as follows: First, the company still has inventory to dispatch. At present, the pending orders of various ammonium phosphate manufacturers can be fulfilled until the end of September. Although the amount of pending orders is not large, it is sufficient to maintain a balance between production and sales for these companies, so they do not face significant inventory pressures. It is reported that some large manufacturers in Hubei have around 150,000 tons of pending orders, while in the Northeast region alone there are about 70,000 tons of such orders, which are mainly destined for large compound fertilizer manufacturers in Liaoning, Jilin, and Heilongjiang. Another large manufacturer in Hubei has only a few thousand tons of orders from the Northeast region, but its total pending orders still amount to 50,000–60,000 tons. It is said that these orders from the Northeast will also be shipped out gradually after September 15th. It is evident that some large manufacturers are facing tight shipping schedules recently; the main reasons for this are a relatively limited number of transport vehicles, as well as an excess supply of ammonium sulfate – which is used in their own compound fertilizer production – resulting in slower delivery of orders for ammonium sulfate sent to external customers. Having heard that shipments by other ammonium sulfate manufacturers, especially those in Hubei, have also been strained recently, this situation has to some extent brought in orders for ammonium sulfate manufacturers in regions such as the southwest. Secondly, although there aren’t many new orders at the moment, there will be certain demand opportunities in the Northeast in the future. Recently, companies have not had many new orders; aside from a few large firms, smaller companies have mainly received small orders, with few large-scale contracts being placed. Most compound fertilizer manufacturers in the Northeast plan to start production in mid-to-late October, which is a delay compared to previous years; they tend to purchase raw materials such as ammonium sulfate around the end of September. As of now, cases of early procurement of ammonium sulfate have been observed only in a few representative compound fertilizer companies in the Northeast, so there will still be certain demand opportunities in that region in the future. Finally, the price of raw sulfur has seen a slight improvement recently. Recently, driven by rising international sulfur prices, the domestic sulfur market has seen price increases, with electronic trading platforms also showing upward trends. At present, the price of granular sulfur at the Yangtze River Port and Fangchenggang Port has exceeded 700 yuan, while the price of sulfur from Puguang has also risen; currently, the sulfur price at the Wanzhou Port and the Dazhou plant is 700 yuan and 650 yuan respectively. In the long term, due to high inventory levels, it is unlikely that sulfur prices will rise significantly; however, in the short term, they still provide some support for the price of monoammonium. In summary, everything has two sides; there are no permanent positives nor permanent negatives. IAM still faces certain challenges, and there is a strong desire for stability. It is expected that the price of IAM will remain relatively stable in the short term. (Zhao Hongye)