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Suddenly neglected – can even ammonium escape price cuts? Author/Source: China Fertilizer Network Date: 2020-12-09 Clicks: 1 Recently, there have been slight signs of a decline in the market price of monoammonium phosphate. It is reported that the spot price for 55% powdered monoammonium phosphate from suppliers in Hubei is around 2000 yuan per ton; for high-quality products, the price is 2030 yuan or slightly higher. However, few transactions are made at these higher prices. Factory quotes remain relatively stable, especially those from companies in Hubei, the main production area, where the export price for 55% powdered monoammonium phosphate is around 2100 yuan. In the southwest region, prices of this product vary slightly: large factories in Sichuan initially quoted 2100 yuan per ton, but now the price is 2050 yuan. Small factories in Yunnan have reduced their prices for high-quality 60% powdered monoammonium phosphate to 2250 yuan. Companies in Guizhou have seen a slight increase in their prices, with 55% powdered monoammonium phosphate now costing 1980 yuan. Whether prices remain firm or experience slight fluctuations, most companies are not under much pressure for now; however, interest in this sector is declining, so it seems unlikely that the price of monoammonium will avoid a drop in the short term Some in the industry believe there is no need to be overly pessimistic. The specific analysis is as follows. Firstly, there is little pressure on factory supply. Most ammonium sulfate factories do not have any inventory; and even if they do, it is mostly ammonium sulfate that is scheduled for shipment but has not yet been sent out. It is reported that large factories in Hubei still have tens of thousands of tons of ammonium sulfate ready for delivery, while those with relatively smaller production capacities may have stock available until the end of December or January next year. At present, although these companies have shifted from suspending orders to controlling their order intake, they only release information about accepting small orders at higher prices, and this is limited to their cooperative clients. Overall, there is no significant pressure on ammonium sulfate prices at the moment; even if there are few new orders in the short term, prices are unlikely to change significantly. In particular, the more confident companies in the Hubei region will maintain stable prices in the short term or continue to refrain from setting prices. Secondly, the social inventory of monoammonium is not very large; it remains mostly in factories. Recently, traders who had been reluctant to sell in the earlier stages have started to release their stock, leading to a slight decrease in prices. However, industry experts say that although traders generally sell the ammonium nitrate they purchased earlier, and these prices are relatively lower than those currently offered by factories, this has led to some relaxation in the ammonium nitrate market. Yet, the stock purchased by traders earlier was mostly from ammonium nitrate factories, and part of the ammonium nitrate purchased by compound fertilizer manufacturers also came from such factories. In fact, the overall inventory in the market is not very large, and ammonium nitrate factories still hold considerable control over the market. Although the price of monoammonium has eased, it is reported that downstream buyers are not very enthusiastic about making purchases. Once again, demand is expected to continue to provide support in the coming period. As mentioned above, compound fertilizer manufacturers are not very enthusiastic about making purchases at the moment. The industry believes that although traders offer relatively low prices, some of these manufacturers have enough stock of monoammonium phosphate to last until next year. Moreover, due to a decline in confidence in monoammonium phosphate, they are not in a hurry to initiate new procurement plans, preferring to wait for the existing stock to arrive at their facilities. However, as the Spring Festival approaches, many fertilizer manufacturers will consider stocking up on ammonium nitrate as a raw material to ensure normal production during the festival, so purchasing activity is expected to pick up at that time. Finally, the support from raw material costs is still decent. In recent months, the inventory levels at Sulfur Port have been on a downward trend; although they remain around 2.4 million tons, this represents a significant drop from the peak level of 3 million tons earlier on. Import prices for sulfur rose sharply to around 900 yuan prior to the phosphorus fertilizer meeting, and while there have been slight fluctuations recently, they remain at relatively high levels for this period. Currently, the price of granular sulfur at the Yangtze River Port is around 900 yuan, while domestic sulfur prices in Puguang are also showing an upward trend, providing some support for sulfur prices at ports. The price at Wanzhou Port is currently 880 yuan. Overall, higher prices for raw sulfur serve as a positive factor supporting the costs associated with ammonium sulfate production. In summary, demand has been relatively weak recently, but overall supply pressure is not high at the moment. Factors such as raw materials and future demand provide support, so it is expected that companies will maintain steady pricing levels with no significant changes. However, there is a risk of further slight declines in market prices in the short term. (Zhao Hongye)