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Urea that can’t be boosted in price; diammonium compounds whose prices can’t rise. Author/Source: China Fertilizer Network. Date: 2020-09-14. Clicks: 7. In mid-September, the autumn rains brought a cool climate, but they also dampened enthusiasm in the fertilizer market. Although international demand was strong, with India issuing one tender after another, urea prices remained low in most regions of the country. Downstream compound fertilizer manufacturers entered the later stage of autumn fertilizer production, and their operational rates declined gradually; there was little demand for raw materials. The agricultural market, too, was influenced by the continuous decline in prices, leading to a cautious attitude among buyers. Recently, news of restrictions on shipments at ports further cast a shadow over the urea market, suggesting that urea prices might see further slight declines in the future. Strong international demand has not been sufficient to boost urea prices; so how is the performance of diammonium phosphate, which is also supported by favorable export conditions? Company quotes remain stable overall. In Hubei province, the standard ex-factory price for 64% diammonium phosphate is between 2250 and 2300 yuan per ton. Large manufacturers in the southwest region offer a delivery price of 2450–2520 yuan per ton for 64% diammonium phosphate in North China, while the delivery price for 57% diammonium phosphate is 2200 yuan. In areas that are not major producers, the ex-factory price for 57% diammonium phosphate is 2150 yuan, and the ex-factory price for 60% diammonium phosphate for local sales is 2226 yuan. Although the export price of diammonium has been rising for a month in a row, with the current offshore price reaching 340–345 dollars, domestic prices have yet to see any new increases. Why is that? Firstly, there are many sources of goods at low prices in the early stage. At present, the goods in the hands of distributors are mostly those from low-priced orders placed around July; new high-priced orders have not yet arrived. Although factory prices are currently high, due to fierce competition among distributors and increasing market transparency, the wholesale price of diammonium phosphate has not risen. Taking 57% diammonium phosphate in yellow granule form as an example, the factory’s price at the first delivery point is 2200 yuan, but the wholesale price in the market is only 2150–2180 yuan. Moreover, overall sales progress is slow owing to factors such as delayed operations by fertilizer manufacturers that use this product in their formulations; it remains uncertain whether the price will rise to 2200 yuan in the future. Secondly, raw material prices remain low, resulting in weak cost support. Although sulfur prices have rebounded recently driven by upward trends in the international market, with the prices of granular sulfur at the Yangtze River Port and Fangchenggang Port exceeding 700 yuan, domestically the prices at Wanzhou Port and the Dazhou plant have risen to 700 yuan and 650 yuan respectively. But given those around 3 million tons of inventory in ports, what expectations can we have for sulfur prices in the future? According to rough estimates by Zhongfei Net, the total cost of high-end diammonium phosphate products is around 2,000 yuan in 64% of cases. Compared with the current factory prices of diammonium phosphate, it is natural that downstream distributors are not very willing to accept these new prices. Finally, the supply is relatively balanced. Driven by strong domestic and international demand, aside from a few factories that suspended production due to technical upgrades of certain units, the production facilities of most diammonium fertilizer manufacturers were operating at full capacity, keeping the overall industry utilization rate high. Against this backdrop, supported by international market demand, there will be no significant shortage in the supply of diammonium fertilizers in the domestic market. The current shortage in some areas is merely due to the fact that certain manufacturers previously focused on exporting their products; as the time for shipments to the domestic market arrives, factories will naturally shift their focus to domestic sales, and the shortage issue will ease. In summary, the diammonium market is faced with both positive and negative factors; the grassroots market has yet to see activity, and it will be difficult for prices to continue rising significantly in the short term. (Rong Guangwen)