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Ammonium nitrate is ready for action; its market prospects shouldn’t be too poor. Author/Source: China Fertilizer Network. Date: 2020-12-17. Clicks: 2. With half a month left before the end of the fourth quarter, the market for ammonium nitrate, which had been booming for several months, is gradually losing its intensity. Companies are maintaining firm pricing; in particular, large manufacturers in Hubei, the main production area, are still offering 55% ammonium nitrate powder at 2100 yuan per ton, while smaller manufacturers are offering it at 2050 yuan per ton. It is reported that the actual price at the point of delivery is around 2050 yuan. Traders are selling 55% ammonium nitrate powder at around 2000 yuan in cash. Recently, there has been little change in the price of ammonium nitrate, with only slight fluctuations in pricing by some companies due to their own reasons. What will be the trend of ammonium prices by the end of this year and the beginning of next year? The author’s analysis is as follows: On the supply side. In the first half of this year, as the pandemic situation improved, ammonium sulfate manufacturers gradually resumed operations. In order to accelerate production, they reduced the time allocated for regular annual maintenance; some companies even did not take time off for maintenance at all. As a result, if demand remains weak in the future, these companies will face considerable pressure, and they may have to reduce production or even stop operations in order to alleviate that pressure. At present, there are still some pending orders for monoammonium that need to be fulfilled, with delivery likely to take place through early to mid-January next year, and in some cases until the end of January. This indicates that inventory pressure for monoammonium at the beginning of next year should not be high; even if there is inventory available, it will mostly consist of orders that have not yet been shipped. Having benefited from low inventory levels this year, factories are likely to continue to maintain low inventory levels as well. On the demand side. Recently, the demand for ammonium nitrate has slowed down, and downstream compound fertilizer manufacturers have become less enthusiastic about making purchases. The ammonium nitrate purchased in previous batches at different prices has not yet all arrived at the factories; there is pressure on ammonium nitrate producers to ship the goods as soon as possible. Additionally, with few new orders for compound fertilizers, these manufacturers lack confidence in the availability of raw materials, so they have limited plans to purchase more ammonium nitrate. With the end of the year approaching and the New Year still some time away, new demand for ammonium nitrate has not yet emerged. Although the price of monoammonium nitrate sold by traders is relatively lower than that at factories, it is understood that traders do not have much stock of this product; and even if they do have some, it is mostly stock that has not yet been shipped out by the factories. As a result, it is difficult for this to have a significant impact on the monoammonium nitrate market for now. It is expected that there will be a demand for monoammonium phosphate on the downstream side before the Spring Festival. Large compound fertilizer manufacturers are likely to take action in late January or around the end of the month, but specific actions will still depend on the actual conditions on both upstream and downstream sides. Regarding upstream raw materials. This year, the price of phosphate rock rose around October, remaining relatively stable at other times; it is expected that there will be no significant fluctuations in ore prices next year. The price of raw sulfur continued to rise. In Gao Gang, where the production volume of sulfur exceeded 3 million tons this year, the price started to fall in the second half of the year, especially in the fourth quarter. Currently, the overall stock levels there have dropped to around 2.4 million tons, reducing the pressure associated with these stock levels. Coupled with factors such as electronic trading platforms, the US dollar, and domestic sulfur prices, the import price of sulfur has risen from less than 600 yuan to over 900 yuan. Due to factors such as the declining stock levels in Gao Gang, the price of sulfur exceeded 1,000 yuan in 2021. In summary, the cost structure of ammonium nitrate provides decent support; it is expected to improve further next year. As long as the supply of ammonium nitrate is managed properly, inventory pressures should remain low. However, there are still some concerns regarding demand. In the future, it will be necessary to pay attention to factors such as the operating levels and sales performance of downstream compound fertilizer manufacturers. Currently, the market for ammonium nitrate has cooled down, and industry experts believe that its price will not drop significantly in the short term, with a potential decline of around 50 yuan. (Zhao Hongye)