Monammonium: A surge of strength after long preparation or a futile struggle to survive?

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Monammonium: A surge of strength after long preparation or a futile struggle to survive? Author/Source: China Fertilizer Network Date: 2021-01-07 Clicks: 6 Upon the return from the New Year’s holiday, the price of monoammonium nitrate remained stable, with a relatively sluggish market. Most companies continued to use their previous pricing; only a few large manufacturers in Hubei and Sichuan reduced their prices for monoammonium nitrate. The ex-factory price of 55% powdered monoammonium nitrate dropped from 2050 yuan per ton to 2000 yuan per ton. It is also reported that the actual ex-factory price of the lower-quality 55% powdered monoammonium nitrate fell to around 1950 yuan, with industry experts believing that this price could drop to 1900 yuan in the future. Given the current market conditions, ammonium sulfate prices are likely to continue on a downward trend. So what will be the actual trend for ammonium sulfate prices? The author’s analysis is as follows. 　　Ammonium nitrate, which has been in high demand for several months, sometimes experiences a decline in demand. Currently, the demand for ammonium nitrate is not very good; there is still some time before the Spring Festival, and the New Year’s holiday has just passed, so the true state of the market has not yet become clear. The sales performance of compound fertilizer manufacturers has also been poor recently, with slow rates of consumption of finished products. In addition, there are still environmental protection warnings in various regions. Industry experts believe that the overall production capacity of compound fertilizer manufacturers may decrease in the future, which will lead to reduced consumption of ammonium nitrate. As a result, these manufacturers might delay their plans to purchase new raw materials, waiting for the existing stock to be used up while awaiting the arrival of more ammonium nitrate. However, many in the industry believe that although demand has slowed down recently, compound fertilizer manufacturers will likely experience a surge in purchasing activity before the Spring Festival in order to ensure normal production during that period. Moreover, due to the pandemic, companies tend to stock up on raw materials in advance to support spring plowing activities. 　　The slowdown in demand will not pose significant pressure on ammonium sulfate producers for the time being; most of these companies maintain low inventory levels and produce and ship goods as they are produced. Recently, many companies have been fulfilling orders placed at lower prices earlier on, while some have also received new orders. The orders pending fulfillment can be fulfilled through mid-to-late January or at the end of January. Currently, ammonium sulfate producers in regions such as Hubei, Hebei, Yunnan, and Anhui are handling export orders, with relatively favorable ex-ship prices. In Henan, some companies’ granulation plants are under maintenance due to environmental protection regulations, and once they resume operations, there will still be orders to be fulfilled. It seems that the pressure on enterprises is not high for now; in the coming period, attention should be paid to whether demand from downstream compound fertilizer companies will see an improvement ahead of the Spring Festival in mid-to-late January. 　　In addition to supply and demand conditions, raw material costs also need attention. Recently, the inventory levels at Sulfur Port have shown a continuous downward trend. The price of sulfur in Puguang in China has also increased slightly, with suppliers being inclined to raise prices. At present, the price of granular sulfur at the Yangtze River Port is around 975 yuan. This week, the prices of sulfur in Puguang at the Wanzhou Port and Dazhou plant sites rose to 950 yuan and 870 yuan respectively. Given this trend, it should not be difficult for the price to exceed 1,000 yuan. Phosphorus ore prices remain largely stable for now. In some areas, the price of liquid ammonia dropped slightly after rising sharply due to factors such as gas restrictions, but it was still higher than before; this at least provides some relief for the costs associated with ammonium nitrate production. 　　In summary, although the price of monoammonium phosphate is on a downward trend, given the supply and demand situation as well as raw material costs, the market for this product is not likely to deteriorate significantly; the decline in prices should also be modest. It is unlikely that the industry will struggle to survive, but there is still hope for recovery over time. In the future, it will be necessary to pay attention to the pandemic situation, as it could have an impact on the market for monoammonium phosphate. 　　(Zhao Hongye) http://www.nmtech.com.cn/sys/sec_zxwz.jpg