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Sales reached 2,050, a 300% increase year-on-year; Yiammon is truly awesome! Author/Source: China Fertilizer Network Date: 2020-11-12 Clicks: 7 It has been reported that the actual price at which 55% powdered monoammonium phosphate is sold from factories in Hubei province has risen to 2050 yuan per ton (the same unit is used throughout). As companies are reluctant to sell their products and there is intense demand from downstream users, this price of 2050 yuan per ton has become fixed. Last week, the ex-plant price of 55% ammonium sulfate in Hubei region rose to 2,050 yuan, while the actual transaction price was around 2,000 yuan. Major manufacturers in Sichuan also raised their prices to 2,050 yuan. Many companies have stopped providing quotes and taking orders; however, they may accept a small number of high-priced orders from key clients. It is reported that a large compound fertilizer manufacturer in Shandong recently purchased 55% ammonium sulfate at a price around 2,000 yuan. Such a transaction price is 300 yuan higher than that of the same period last year; last year, a minimum price could still be agreed upon. However, circumstances vary from year to year, and this year, due to factors such as the pandemic, the market situation for ammonium nitrate differs from previous years. In any case, positive factors are currently playing a dominant role, so a price increase is inevitable. So what are the positive factors? First, the company maintains a stock-free status. Since the outbreak of the epidemic at the beginning of the year, the overall operating rate of ammonium sulfate production enterprises in Hubei, the main production region, has dropped significantly; most of these enterprises stopped or reduced their production. In February, the operating rate in Hubei was less than 30%. Enterprises in other regions also reduced or halted their production to varying degrees, which led to a decrease in the overall supply of ammonium sulfate. The inventory that companies had accumulated over the previous year was thus used up at the beginning of the year. Since then, the inventory levels of ammonium-based enterprises have been low; some of them have no inventory at all and operate on a just-in-time basis. Enterprises that were scheduled for maintenance in May and October temporarily postponed or abandoned these maintenance tasks due to an increase in orders pending fulfillment at that time. At present, there is very little inventory available among monoammonium producers and traders; most companies have suspended taking on new orders and are focusing on fulfilling existing orders. A few traders do have stock available, but they are reluctant to sell it. It appears that the overall supply of monoammonium is relatively tight. Secondly, downstream demand was officially released in advance. Before the National Day holiday, several large compound fertilizer manufacturers in the Northeast region, as well as some such manufacturers in Shandong and other areas, purchased raw materials for winter storage in advance. As a result, some large ammonium phosphate manufacturers in regions like Hubei ended up with inventory amounts of over 100,000 tons. After the National Day holiday, and with the postponement of the phosphorus-based compound fertilizer conference, the market for winter storage of ammonium phosphate began to operate ahead of schedule, and compound fertilizer companies in the Northeast, Shandong, and the Two Rivers regions started purchasing ammonium phosphate raw materials. In October, the delivery price of 55% powdered monoammonium phosphate at Bayuquan Port rose gradually from 1,940 yuan to over 2,000 yuan; after that, sales were halted and no new orders were accepted. It is expected that even if supply resumes, the price will rise to over 2,100 yuan or even around 2,200 yuan. Fertilizer companies that did not purchase sufficient amounts of ammonium phosphate in the early stage are gradually accepting higher prices for it. Many of these companies have enough ammonium phosphate stock purchased earlier to sustain fertilizer production until near the end of the year; however, fearing a shortage of this material in the future, they are willing to buy it at higher prices despite the cost. After all, there are not many ammonium companies that can take on orders, nor are there many traders with stock available. Finally, the stabilization of raw material prices serves as a strong backing for monoammonium. After the increase, phosphate rock prices have remained stable, and downstream manufacturers have gradually accepted the higher prices of 10–30 yuan. Although there have been few changes in subsequent periods, these prices have provided some support for the cost of monoammonium phosphate. After some minor fluctuations recently, some industry experts believe that sulfur prices are likely to remain stable or see a slight increase in the future. This is mainly due to the gradual reduction of overall sulfur inventory over the past few weeks, as well as factors such as the pandemic, which have led to fewer shipments arriving by ship. Although a significant price rise is not expected for now, it still provides some support for the costs associated with ammonium sulfate. It is reported that the price of liquid ammonia in Hubei has recently exceeded 3,000 yuan at the time of delivery, putting an end to its long period of low prices. In summary, although some in the industry are slightly concerned about the market situation for monoammonium phosphate in January and February next year, the current positive factors for this product outweigh these concerns; therefore, prices are likely to continue rising in the short term, along with increased transaction volumes. (Zhao Hongye)