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No worries about price increases for monoammonium phosphate; scarcity drives up prices. Author/Source: China Fertilizer Network Date: 11-19-2020 Clicks: 4 By mid-November, monoammonium phosphate remained in high demand, with price increases continuing to be a key feature of its market trend. It is reported that the price for new orders of 55% powdered monoammonium phosphate in Hubei is currently 2050 yuan per ton. Some factories and intermediaries even claim that due to tight supply, the price of this product in the spot market has risen to 2080–2100 yuan per ton, with the 2050 yuan price point no longer applicable in the market. The price of monoammonium has been rising for two months. The rate of increase should have gradually slowed down, but so far it remains high, with a tendency to keep rising even more. The main reason for this is the scarcity of available stock. So, the reason for such a situation is largely due to an imbalance between supply and demand. It is reported that large manufacturers in Hubei still have orders worth over 100,000 tons pending fulfillment, and many companies’ pending orders can be met until around late December. This shows that these manufacturers have sufficient orders to handle. Additionally, since many downstream companies are eager to receive their goods, these manufacturers continue to focus on fulfilling earlier placed orders; there are few companies willing to take on new orders, and they are unable to accept large quantities of orders at once. The overall inventory levels in the ammonium nitrate industry have remained low for a long time; many companies operate on a just-in-time basis, producing and delivering products as they are manufactured. Numerous companies have not carried out regular maintenance of their facilities this year, with only a few conducting short-term maintenance or rotating maintenance of their equipment. As of the second week of November, the operational rate in the ammonium nitrate industry was 50.82%. Although this rate is considered high this year, it is still below the 60-70% levels seen in previous years. In recent years, the ammonium nitrate industry has undergone significant changes, with many companies disappearing or ceasing operations without anyone noticing, indicating that the industry’s production capacity has declined compared to earlier years. Demand is amplified when supply remains tight. Recently, as high prices for monoammonium phosphate have become the actual transaction prices, downstream companies’ demand for it continues to rise. Although they are somewhat hesitant about purchasing monoammonium phosphate at such high prices, they are willing to compromise when they need to obtain it urgently. The industry remains optimistic regarding monoammonium phosphate, and many traders will continue to stock up in appropriate price ranges; there is still value in short-term trading strategies. Fertilizer manufacturers that lack sufficient raw materials are also eager to inquire about supplies, so demand remains relatively strong. Many of these manufacturers urge monoammonium phosphate producers to deliver goods as soon as possible, and in order to maintain production, they may be willing to pay high prices to get the products promptly. In addition to supply and demand dynamics, the raw materials for monoammonium also provide some support for its cost. The price of sulfur has risen since November. Although there have been no significant changes in recent times, it remains at high levels seen in recent months. Currently, the price of granular sulfur at the Yangtze River Port and Fangchenggang Port is 780 yuan, up 75 yuan from before November, while the price at the Puguang Wanzhou Port is 810 yuan, an increase of 90 yuan compared to before November. The rise in phosphate rock prices has stabilized, and prices are currently largely stable. The price of liquid ammonia has also been rising gradually from low levels; currently, the mainstream ex-factory price of liquid ammonia in Hubei province has exceeded 3,100 yuan. In summary, the supply of monoammonium is tight, demand remains strong, and the cost of raw materials provides sufficient support; therefore, it is expected that prices for monoammonium will continue to rise in the short term, with high prices being seen in actual transactions as well. (Zhao Hongye)