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Is winter storage in order? The Northeast has the final say _ Author/Source: China Fertilizer Network Date: 2020-09-14 Clicks: 50 As we enter September, the period known as \"Golden September and Silver October,\" the atmosphere of harvest grows stronger by the day. Currently, the autumn compound fertilizer market in many regions has entered its final stage; companies have completed fulfilling their prior orders, with overall delivery volumes to downstream users exceeding 70%. Additionally, demand for replenishments will also be met gradually by the end of this month. Compared to previous years, the overall demand for wheat fertilizers in most regions has not changed significantly, remaining roughly the same; however, there are still delays in some local markets, and the progress is slow. The autumn fertilizer market is coming to an end, and winter storage has quietly come into focus. As the final phase of each year’s business cycle, winter storage is a crucial aspect, and compound fertilizer manufacturers are gearing up actively for it. However, unlike in previous years, the challenges associated with this year’s winter storage may be more pronounced and complex. As early as early August, some compound fertilizer companies began to set tentative prepayment prices and promotional offers for winter storage; in the Northeast region, these prepayment prices were generally much lower than in previous years, with some quotes being rather confusing. Although distributors are willing to make payments, prices have already dropped before winter storage even officially begins. At present, the advance quotes for winter storage have disappeared; most of them are based on interest calculation rather than fixed prices. Many companies intend to start their winter storage preparations in October, but the difficulty in determining prices is a concern, and opinions in the market vary on this matter. Firstly, it is difficult to predict raw material prices. Compared to the compound fertilizer market, the recent trends in raw material prices have been somewhat volatile. The price of urea has been weak; following several import tenders issued by India, the impact on the export market has gradually diminished. With a relatively slow demand for agricultural use domestically, compound fertilizer manufacturers have slowed down their purchasing pace. Additionally, issues related to port capacity restrictions have forced urea manufacturers to lower their prices, and the outlook for the future remains pessimistic ； The price of monoammonium remains stable; the peak season in autumn is coming to an end, reducing the likelihood of price increases once again ； Although the price of potassium chloride has risen recently, there is insufficient underlying support; as a result, the prices of raw materials remain volatile, and the outlook for the coming period is uncertain, making it difficult to determine the prices for winter storage. Secondly, the price tone has likely been set. In addition to the unstable prices of raw materials, another major reason for the delay in setting winter storage prices is the relatively low price levels. The prices of compound fertilizers during the summer and autumn periods are clearly lower than those in the same period last year, and there are continuous new products on the market, leading to chaos in pricing. As mentioned above, after some compound fertilizer manufacturers in the northeast region released their winter storage prices in advance to collect payments on a short-term basis, the market reacted with mixed emotions. Distributors were naturally willing to purchase goods at lower prices, but the pressure fell on the compound fertilizer manufacturers themselves. Due to recent fluctuations in raw material prices, many of those initial winter storage prices have been revoked. In particular, companies that do not have sufficient raw materials are currently planning to purchase such materials while also working on setting new winter storage prices. Based on the current state of raw material prices and market sentiment, it is likely that winter storage prices will remain relatively stable. Finally, the level of competition is unimaginable. Depending on the season, winter storage practices vary greatly from place to place. In the Northeast region, the winter storage market represents one of the most anticipated seasons each year, with relatively high demand; as a result, competition among companies intensifies. This is especially true this year, as the fertilizer market as a whole remains sluggish, and the rollout of compound fertilizers across different seasons is significantly delayed. Seizing the winter storage market has become the \"ultimate goal\" for many companies. For this reason, low prices for winter storage products appear early on. Although those initial prices have now been removed, some companies are seeing satisfactory revenue levels, basically meeting their expectations. However, companies that are preparing for winter storage face considerable pressure and can only wait for raw material prices to stabilize before determining final prices. In summary, a major winter storage trend is likely to emerge in October, but expectations are not very high; both the conditions of raw materials and market sentiment seem insufficient to support price increases. (Feng Hongyang)