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Diammonium winter storage: 2700. Do you dare to take it? Author/Source: China Fertilizer Network Date: 2020-10-09 Clicks: 23 With the National Day and Mid-Autumn Festival falling on the same day, people are enjoying a long holiday, and the fields are filled with signs of harvest. The sale of wheat fertilizers is nearing its end, and the autumn fertilizer market is gradually coming to a close. The annual winter storage market has also seen its activities begin. In terms of compound fertilizers, the Northeast region took the lead in this regard, but diammonium phosphate producers were not far behind; major manufacturers in the Southwest have also announced their winter storage prices for the Northeast region. The price for 64% diammonium phosphate at the first delivery point in Heilongjiang is 2,700 yuan per ton, a price that is roughly equivalent to the retail price during spring. So the question is, would you, as a downstream distributor, dare to take it? To answer the question above, we need to analyze carefully the current diammonium phosphate market. As the autumn market enters its retail phase, demand from international markets is strong; most factories have limited stock available in October, and companies are setting high prices. In Hubei province, the mainstream ex-factory price for 64% diammonium phosphate is 2250–2300 yuan, while large manufacturers in the southwest region charge 2450–2550 yuan for delivery at the buyer’s location in North China. The quoted price of 2,700 yuan for the 64% diammonium fertilizer upon arrival in Heilongjiang, mentioned earlier, is based on the current prices in the autumn market. But will the strong demand for diammonium fertilizer continue into the future as well? From the perspective of diammonium enterprises. Currently, autumn sales in the domestic market have largely come to an end, and manufacturers are waiting before starting production. International market prices remain high; for some companies with lower export costs, international prices are even higher than those in the domestic market. Some factories can start delivering new orders as early as mid-November. It is evident that at present, diammonium fertilizer manufacturers are not under much sales pressure. Moreover, due to the outbreak of the epidemic in spring, some companies had to suspend production for up to a month, which resulted in low levels of inventory in regions such as the Northeast and Northwest. As a result, there is significant potential demand for winter storage, and it is only natural that these companies would not want to miss out on this major market opportunity at the end of the year. At present, although the autumn market is performing very well, since some companies have not yet finalized all the pre-sale orders placed, the provisional prices for winter stockpiling will naturally not be too low in order to facilitate the final settlement for the autumn market. From the dealer’s perspective. This year, the provisional price for the first batch of winter storage in Heilongjiang is as high as 2,700 yuan, which is almost on par with the retail price in spring. There was little reaction from end-users, and only a few people made payments. Apart from the lower willingness to accept high prices, this also reflects the concerns of downstream distributors regarding the future market. Firstly, it remains to be seen whether strong international demand can be sustained; there is a severe overcapacity for diammonium phosphate production in the domestic market, and any improvement in market conditions relies on export support. The upward trend in the market this autumn is the best example of this. With such high import levels in the third quarter, it is concerning whether international buyers such as those in India will still be able to continue importing during the fourth quarter and until the first quarter of next year ； Secondly, the pricing of compound fertilizers as alternatives for winter storage is low; not to mention the initial price of 1,800 yuan per ton for 45% compound fertilizers in the Northeast region, even the current price of 1,950 yuan per ton in factories in regions like Shandong is about 550 yuan lower per ton when adjusted for delivery costs in Heilongjiang. In summary, as autumn comes to an end, attention is increasingly focused on the winter storage market. Different parties involved in this chain have varying opinions; at present, downstream distributors bear greater risks. Whether to make payments depends on future policies set by manufacturers as well as market trends (Rong Guangwen)