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Nitrogen, phosphorus, and potassium prices keep rising – how to source raw materials? Author/Source: China Fertilizer Network Date: 2020-10-26 Clicks: 18 Recently, the prices of nitrogen, phosphorus, and potassium fertilizers have all risen. With the announcement that the meeting on phosphate-based fertilizers has been postponed, the atmosphere in the fertilizer market has become more active. Many compound fertilizer manufacturers have taken early action to prepare pricing strategies for winter storage and to start purchasing raw materials. Given the continuous rise in the prices of these raw materials, should compound fertilizer companies proceed with purchasing them? Recently, the prices of urea in Shandong and the two river regions have continued to rise slightly. At present, the purchase price of urea by compound fertilizer manufacturers in Linyi, Shandong, has risen to around 1,760 yuan per ton, an increase of about 50–60 yuan since the end of the holiday period. It is reported that port operations have resumed recently, while low-priced supplies from other provinces have been suspended as they are primarily intended for export. As a result, companies have raised their pricing slightly. However, domestic demand for urea has not yet really started to increase. Additionally, urea-producing enterprises limit their production on a yearly basis, so although supply has decreased, the overall supply pressure remains low; it is actually slightly higher than the same period last year. It is expected that urea prices will continue to rise. Some compound fertilizer manufacturers have already stocked up ahead of the National Day holiday, especially the larger ones. These companies will mainly purchase urea according to their needs at present and are unlikely to accept high prices; they will only replenish their inventory when they find relatively favorable prices. The price of monoammonium phosphate continues to rise. Currently, the mainstream ex-factory price for 55% powdered monoammonium phosphate in Hubei Province has risen to 1850–1900 yuan. Large manufacturers in Sichuan have raised their prices twice; now the ex-factory price for 55% powdered monoammonium phosphate there is 1900 yuan. The ex-factory price in Henan has also reached 1900 yuan. Although downstream buyers are temporarily willing to accept an ex-factory price of 1850 yuan, most companies do not have any inventory available, and orders that have been placed can only be fulfilled within about 40 days. As a result, companies have stopped accepting new orders for now. Recently, there has been a shortage of 55% ammonium sulfate in stock at Bayuquan Port, and the ex-warehouse price there has risen to over 2,000 yuan. Many large manufacturers of compound fertilizers purchase monoammonium phosphate in advance before the National Day holiday; currently they are waiting for this product to arrive at their plants gradually. The amount purchased each time is not large. Although small and medium-sized compound fertilizer companies also make purchases, the quantity ordered per order is modest. Some large manufacturers of compound fertilizers have enough ammonium phosphate in stock to meet production needs until around December; therefore, unless they can find more favorable prices and supply sources, they are not in a hurry to make new purchases at the moment. The market situation for potassium chloride remains favorable. Although prices of potassium chloride at ports seem to have reached their upper limit, there is no indication of price cuts for now. The supply of domestically produced potassium chloride is tight, and it has been confirmed that prices of potassium chloride derived from salt lakes will rise in November. Agents have temporarily stopped selling it. It is reported that the price of high-quality 60% powder upon arrival at ports is already above 1,900 yuan. However, sales at such high prices are not satisfactory; companies producing compound fertilizers, among others, are pushing for low-priced supplies purchased earlier. Companies believe that the total stock of potassium chloride at ports is sufficient, and given the low demand recently, any increase in prices is likely to be artificial, so purchases are still made only as needed. In summary, the recent slight increase in urea prices is mainly due to the resumption of loading and unloading at ports as well as companies fulfilling their export orders; in the long term, there will still be an ample supply of urea, so compound fertilizer manufacturers are not in a hurry to make purchases ； The price of monoammonium phosphate has risen sharply; if procurement is urgent, it is possible to make purchases at this time. It is expected that demand for monoammonium phosphate will remain high and its prices will stay elevated around mid-December. Therefore, if there is no urgency, fertilizer manufacturers might as well wait and observe for now ； The price increase trend for potassium chloride has slowed down; prices for salt lakes are expected to rise. Most compound fertilizer manufacturers are waiting for supplies available at lower prices earlier on, and new purchases will likely be made as needed. (Zhao Hongye)