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Is the price of monoammonium going up? Finally, it’s necessary to consider the author/source: China Fertilizer Network. Date: 2020-09-17. Clicks: 57. Since the beginning of September, shipping has been somewhat strained for some ammonium sulfate producers; in particular, a few large factories in Hubei have received orders worth tens of thousands of tons from the Northeast, resulting in a total amount of goods awaiting shipment of around 150,000 tons. Some companies with limited production capacity in Sichuan, Henan and other regions also reported strained shipping conditions recently. Although there aren’t many new orders, most of those that do exist are small-scale ones, yet customers are eager to receive their goods, which puts pressure on the companies’ production and shipping capabilities. As a result, it seems likely that the price of monoammonium will increase. Based on past experience, its price is likely to rise, but the actual increase in transaction prices will still depend on future demand conditions. At present, the overall demand for ammonium nitrate is not high. Apart from a few companies in this sector that are receiving good new orders, other firms have mainly received small or urgent orders recently. The price drop of ammonium nitrate in August encouraged some downstream compound fertilizer manufacturers to restock their supplies. Combined with the amount of ammonium nitrate that had not been used up earlier, these compound fertilizer manufacturers are still cautious about making new purchases of ammonium nitrate. However, there is indeed an increased interest in this product, mainly because there are signs of rising demand for it in the Northeast region. As mentioned earlier, the large ammonium nitrate producers in Hubei have received tens of thousands of tons of orders from several large compound fertilizer manufacturers in Liaoning, Jilin, and Heilongjiang. It appears that at present only a few large compound fertilizer manufacturers in the Northeast have started purchasing ammonium nitrate, while most others have not taken any action yet. These companies plan to start operating gradually in mid-to-late October, and they will begin planning their purchases of ammonium nitrate around the end of September or early November. It seems that the timing of these companies’ operations will be later than in previous years. If the demand for monoammonium phosphate among fertilizer manufacturers in the Northeast rebounds, it could contribute to the overall national demand for this product; however, further monitoring will be necessary to determine the exact situation. In addition to looking at demand, supply also needs to be considered. As of the second week of September, the operation rate of the ammonium phosphate industry across the country was 50%, while in Hubei Province it was close to 60%. Several large manufacturers were operating at near full capacity, with orders worth tens of thousands of tons waiting to be shipped. Companies that possess their own compound fertilizer production facilities also increased their use of ammonium phosphate for their own needs; as a result, these companies were eager to produce and dispatch goods as soon as possible. For companies with low production volumes, production and shipping have also become strained recently; this is not due to a large number of new orders, but rather because downstream customers are in urgent need of goods. The existing backlog of orders, along with recent small and urgent orders, has led to short-term difficulties in shipping for these companies. In September, most companies are likely to maintain this situation of tight supply. However, as new orders decrease and become less concentrated in October, the supply pressure on some companies will gradually increase. Going forward, it will be necessary to pay attention to the inventory levels and production levels of ammonium nitrate producers. In addition to supply, the raw materials also need to be considered. Recently, the author learned from phosphate rock traders that there have been no significant changes in phosphate rock prices, and they are likely to remain stable in the short term. Recently, the price of liquid ammonia in Hubei has risen due to factors such as a decrease in supply. Currently, the mainstream ex-factory price is around 2600–2650 yuan per ton, but overall, the price of liquid ammonia remains relatively low. Although the price of sulfur rose significantly at the beginning of the month due to factors such as rising international sulfur prices, high inventory levels in Gaogang remain a major factor hindering further price increases. Coupled with modest demand for sulfur, it is unlikely to see significant price rises in the short term. Currently, the price of granular sulfur at the Yangtze River port is around 700 yuan per ton. Based on the current selling price of monoammonium phosphate and its total costs, the profit margin for 55% powdered monoammonium phosphate is around 200 yuan per ton; it is reported that companies that possess raw materials such as phosphate mines can achieve even higher profits. Seeing this situation, downstream compound fertilizer manufacturers and traders are unlikely to be very receptive to price increases for monoammonium phosphate. Overall, the demand for monoammonium phosphate is not as strong as it seems on the surface. Given the supply situation and raw material costs, prices of monoammonium phosphate are likely to remain stable in the short term. Prices may rise in the future, but whether this will actually happen depends on future demand and other factors. (Zhao Hongye)