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Ammonium nitrate manages to turn things around despite challenges; its performance is noteworthy. Author/Source: China Fertilizer Network. Date: December 14, 2020. Clicks: 4. As 2020 came to an end, the market for ammonium nitrate continued to show relatively good conditions. Throughout the year, the impact of the pandemic did not manage to overwhelm the enterprises in Hubei, the main production region; they overcame various difficulties to ensure that spring planting could proceed as usual. The inventory accumulated by these ammonium nitrate producers was gradually consumed, and downstream compound fertilizer manufacturers were keen to purchase raw materials in advance to ensure fertilizer production. This led to a reduction in the inventories of ammonium nitrate producers, while the amount of product available for shipment increased. This situation meant that ammonium nitrate producers had the upper hand throughout the year. Throughout different periods, there was little pressure related to inventory levels, and the supply side had a clear advantage. However, towards the end of the year, new purchases by downstream users slowed down, and prices in the market dropped below what the producers were offering. It is expected that there will be some downward pressure on ammonium nitrate prices at the beginning of 2021, but factors such as demand during the period before the Spring Festival might help to reverse this trend. Looking back at 2020, the price of monoammonium phosphate remained relatively stable, with companies facing little inventory pressure for most of the time. The only period when inventory pressure was significant was in January, when various monoammonium phosphate manufacturers had considerable stock levels. Although some companies reduced production or even stopped operating, resulting in low production levels, the supply pressure was still high; shipments were slow, and new orders were delayed. The inventory held by downstream compound fertilizer manufacturers was sufficient to ensure normal production of compound fertilizers during the Spring Festival. As a result, the price of monoammonium phosphate stayed low – the actual ex-factory price for 55% powdered monoammonium phosphate in Hubei was between 1730 and 1780 yuan per ton (prices are given per ton thereafter). However, as the pandemic worsened, enterprises in Hubei that had ceased production in February still had not resumed operations. The fertilizer manufacturers downstream were stepping up their production efforts and showing confidence in ammonium phosphate, fearing that supply shortages or constraints might arise due to the pandemic. As a result, their purchasing intentions were relatively strong, which helped to reduce the inventory buildup among ammonium phosphate producers, and the number of orders received also increased. By late March, the actual selling price of 55% ammonium phosphate powder in Hubei rose to between 1850 and 1930 yuan per ton. Although demand decreased towards the end of the month, slowing down new purchases by downstream customers, some ammonium phosphate producers gradually resumed operations, while others still had orders pending fulfillment, so the pressure remained moderate for now. In April, the price of monoammonium continued the downward trend seen at the end of March; the actual ex-plant price of 55% ammonium sulfate in Hubei province dropped to 1720–1800 yuan. The overall production rate remained high, resulting in an increased supply of monoammonium and smooth shipments. By the end of the month, companies had few orders pending shipment. Fortunately, most companies did not have any inventory, so the pressure was not significant for now. After the price of monoammonium phosphate dropped in May, it remained relatively stable. Companies had many orders pending, which could be fulfilled through mid-to-late June. Some large manufacturers began to raise their prices tentatively, and by the end of the month, some large producers of compound fertilizers started making advance purchases, thus laying the foundation for a rise in the price of monoammonium phosphate. As expected, prices rose across the board in June. Although transactions at high prices remained limited, overall demand improved, and there was still a steady demand. By the end of the month, the price of 55% powdered ammonium sulfate supplied by a major factory in Hubei and accepted for storage in Shandong was between 1950 and 1970 yuan. Downstream compound fertilizer manufacturers slowed down their new purchasing plans by the end of June, adopting a wait-and-see attitude; however, demand is expected to remain strong in the future. In July, the price of ammonium nitrate remained relatively stable. Companies received few new orders, and with limited inventory available for shipment, downstream compound fertilizer manufacturers and traders were unwilling to pay higher prices. Additionally, compound fertilizer companies still had ammonium nitrate in stock or that had not yet arrived at their facilities, which led to a slight slowdown in demand. In August, September, and October, the trends were once again downward, stable, and upward respectively. In August, ammonium phosphate manufacturers in Hubei and other regions were the first to reduce prices in an attempt to attract orders, but the results were not very satisfactory. In September, prices remained stable, with manufacturers focusing on fulfilling existing orders, which could generally be delivered by mid-to-late October. As downstream customers continued to place orders, there was a shortage of shipments. Towards the end of September, some large compound fertilizer manufacturers began to purchase ammonium phosphate in advance. In October, other smaller and medium-sized compound fertilizer companies also joined in the purchasing spree, leading to a shortage of ammonium phosphate and rising prices. However, some manufacturers suspended taking new orders, preferring to fulfill those orders that were placed at lower prices earlier on. The upward trend continued in November, but some companies shifted from suspending orders to controlling their order intake. Although transactions were made at high prices, the volumes were low, and these were mostly urgent orders. Ammonium sulfate producers only offered high-priced, small-scale orders to their key customers. The market supply of spot goods was tight, and compound fertilizer manufacturers who needed fertilizers urgently would purchase only small quantities. It is reported that the price of high-quality 55% ammonium sulfate powder in Hubei at the factory level is around 2100–2150 yuan. As the orders awaiting shipment gradually decrease and demand weakens, the market situation for monoammonium phosphate in December has shown a downward trend. The prices offered by traders in the market are lower than those set by the factories. However, it is understood that there isn’t much stock of monoammonium phosphate available in the market; most of the supply held by traders still comes from the monoammonium phosphate factories themselves. These factories still have a large number of orders pending shipment, so there is no immediate pressure to sell, and prices remain stable. The industry believes that the price of monoammonium phosphate is unlikely to drop sharply, with prices likely to stay stable for now. Looking at the market situation for monoammonium phosphate in 2020, there was no significant downward trend in its overall price trajectory, and no policies such as price guarantees were implemented. Monoammonium phosphate manufacturers maintained low inventory levels throughout the year, which gave them an advantage for much of the time this year. It is hoped that the market for monoammonium phosphate will not experience sharp fluctuations in 2021 as well. (Zhao Hongye)