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The winter storage drama is now on display; fertilizer raw materials are seeing overall price increases. Author/Source: China Fertilizer Network. Date: 2020-10-26. Clicks: 18. The golden September and silver October period truly is remarkable. Just as two-thirds of October had passed, and in the days when the phosphorus-based fertilizer conference was supposed to take place, the long-dormant fertilizer market suddenly became active once again. Although people couldn’t meet in Qingdao, the prices of nitrogen, phosphorus, and potassium all rose simultaneously, and it seemed that the promotional prices for compound fertilizers were about to become a thing of the past. Although the printing and marking dates kept getting postponed, the urea market overcame its initial difficulties; in recent days it seems to have suddenly realized what to do, abandoned the unstable trends, and started to rise steadily. It is understood that the price at which urea is purchased by fertilizer factories in the Linyi area has risen from 1,660 yuan per ton before November to 1,760 yuan per ton, an increase of 100 yuan. The reasons are as follows: first, there are positive developments in exports, which provide a driving force ； Second, there are signs of rising raw material costs in local markets, which acts as a driving force ； Third, the operational rate in its own industry has declined, so additional power supply has been temporarily added ； Fourth, the reduction in low-priced supply sources has temporarily reduced obstacles. The increase in the price of monoammonium is not that large, but some in the industry still describe it as a skyrocketing increase, mainly because not only has the price gone up, but there has also been a sudden shortage of available stock. A major trader said that the inventory of ammonium nitrate at Bayuquan Port has been sold out, and sales have been suspended temporarily. Starting next week, the price is set to rise to at least 2,020 yuan, which represents an increase of 100 yuan compared to the price before the National Day holiday. The key point is that this price is merely a prepayment for futures contracts; there is no physical stock available. A few days ago, ammonium producers generally stated that they were facing supply shortages and thus restricting new orders, and now almost all of them have temporarily stopped selling their products. As for diammonium phosphate, whose price increase was expected to occur sooner, the market initially dismissed its high price, but now it is also becoming more active. The rise in the price of ammonium phosphate is driven directly by increasing costs, while strong exports serve as the main guarantee. Potassium chloride, which had previously shown little sign of further price increases, is seeing price rises again these days: firstly, although imports of potassium have seen limited price increases, there is a shortage of domestically produced potassium, leading to noticeable price increases ； Secondly, nitrogen and phosphorus prices have finally risen; they are no longer fighting on their own ； Third, it’s not clear whether it is the domestic market that supports international prices or vice versa; in any case, international potassium chloride prices have become a bit stronger compared to before. Market rumors suggest that the price of 62% talc from major traders at ports could reach 2,100 yuan by next week ； The new price set by Salt Lake Company in November is expected to rise further by the industry ； The dollar cost of monthly import orders for border trade in November rose again ； Driven by factors such as rising prices of potassium chloride, the decline in the price of potash sulfate in Mannheim has come to a halt with some local rebounds. After winning a large order from Yunnan Tobacco, Luoyang Potash Company faces even greater shortages of supply; it has just announced a price increase of 100 yuan and stated that it will not take on any new orders for the rest of the year. The above merely lists the individual reasons for the price increases of the raw materials used as fertilizers; in fact, there are two common and very important reasons behind their overall price rise. First, grain prices soared across the board: corn reached record-high levels first, followed by soybeans, which had previously not seen such high prices, and then rice as well... Manufacturers, who were already inclined to raise prices due to low prices, saw their confidence in demand **increase** as grain prices rose further ； Secondly, winter stockpiling officially began. Large manufacturers, which had started earlier, found that some of the raw materials they had ordered could not be delivered in time, so they were forced to purchase some spot goods. At the same time, smaller manufacturers also began to acquire raw materials. However, due to a lack of confidence in the industry earlier on, manufacturers focused on short-term operations and did not build up large reserves. As a result, when demand for these limited amounts of spot goods increased sharply, supply became very tight – it seemed as though everyone in the world was looking for these goods but couldn’t find them, which led to price increases. Nitrogen, phosphorus, and potassium prices have all risen, and it seems that this upward trend is unlikely to stop any time soon. Recently, most of the low-price promotions offered by compound fertilizer manufacturers have ended; those manufacturers that frequently adjust their prices see an increase in each new pricing round, while those that have not yet set official prices dismiss the current market rates as unrealistic. The fertilizer market in November is bound to present a completely new landscape! In fact, exaggerated claims and hopes regarding grain and fertilizer prices still play a significant role. Although winter storage has begun and the situation seems better than expected, could the nightmare of a slow season that isn’t really slow, and a busy season that isn’t particularly busy, occur again? Is the current price still worth getting into? As early as September, I advised everyone to take action; now that prices have risen again, those who are still hesitating should use a bit more caution and think things through carefully! (Adu)