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Urea’s price changes are even faster than those of books; winter stockpiling has long become something routine. Author/Source: China Fertilizer Network Date: 11-11-2020 Clicks: 9 The most discussed topic in the fertilizer market these days is price increases – the prices of nitrogen, phosphorus, potassium, and compound fertilizers have all risen to varying degrees compared to earlier times, with raw material fertilizers showing the most significant increase. At the beginning of the winter storage period, the prices of compound fertilizers were low; it was not until raw material prices rose that the prices during winter storage started to stabilize. However, market confidence remained somewhat weak. If raw material prices can remain high, the winter storage market for compound fertilizers can barely hold on. However, the frequent fluctuations in urea prices these days are indeed quite concerning. Unlike other fertilizers, the urea market is highly volatile, often experiencing rapid changes in price. Factors such as labeling requirements, localized production restrictions, and rising natural gas costs have contributed to the gradual increase in urea prices, which have reached high levels in many areas. However, there seems to be a risk of price declines at present, due to the expiration of shipping deadlines in the export market and a slowdown in domestic industrial and agricultural demand. It is therefore reasonable to expect fluctuations in urea prices; these fluctuations are likely to have little impact on the winter storage situation for compound fertilizers. Moreover, sharp price swings in urea are unlikely in the short term, so the compound fertilizer market is expected to show a steady upward trend. Firstly, the prices of phosphorus and potassium fertilizers remain high. The prices of compound fertilizers have remained relatively low; the current upward trend indicates that there are indeed significant positive factors related to the raw materials. Taking ammonium phosphate, which is currently very popular, as an example, a price increase is logical – companies had high expectations for demand in the past, and there is little inventory available in the short term. Moreover, the prices of raw materials such as sulfur and phosphate rock have risen, giving ammonium phosphate manufacturers confidence to maintain high prices. As the low-cost raw materials from earlier periods are gradually used up, some compound fertilizer companies are considering restocking their supplies, and the cost of phosphate fertilizers will continue to rise ； The price of potassium fertilizers remains stable at high levels; potassium chloride is likely to continue rising after its current increase, and it will continue to support the prices of compound fertilizers in the future. Secondly, the demand for winter storage still exists. At present, the demand in the winter storage market seems to be stagnant, but there is actually a certain shortage. Although some distributors stocked up on goods at low prices earlier on, it is still too early; as a result, they have only made modest investments and are hesitant to take any bold actions. So far, the progress of winter storage has seen a somewhat stagnant market. One reason for this is that grain prices are high this year, which makes farmers reluctant to sell their crops, and distributors experience slow cash inflows, forcing them to stay away from winter storage initiatives ； The second reason is the rise in the price of compound fertilizers; short-term benefits are evident, but the situation during next spring’s sales season remains uncertain, so dealers are adopting a cautious approach. Finally, the market for diammonium compounds continues to show improvement. This autumn and winter, the diammonium phosphate market has been a focus of attention, with prices rising steadily. As of now, according to Zhongfei Net, the buy-out price for 64% diammonium phosphate in the southwest region upon arrival in Heilongjiang is 2,750 yuan per ton, and prices are expected to continue rising in the future. The domestic market for diammonium fertilizers is booming, primarily due to favorable conditions in the export market. Most companies focus on fulfilling export orders, and the prices there are even more competitive compared to those in the domestic market. It is expected that some companies will continue to supply exports until mid-to-late November, which will lead to a slight shortage of supplies in the domestic market and thus higher prices. The high prices of diammonium compounds will also act as a positive factor supporting the prices of compound fertilizers. In summary, setting urea aside, if the prices of phosphatic and potassic fertilizers remain stable for some time, an increase in the prices of compound fertilizers is inevitable. However, at the current price levels, they are still lower than those in the same period last year. (Feng Hongyang)