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Urea prices keep rising – will ammonium prices rise as well? Author/Source: China Fertilizer Network Date: 2021-01-14 Clicks: 8 Recently, urea prices have risen sharply in regions such as Shandong, the Two Rivers area, Anhui, and Jiangsu, mainly due to increased agricultural demand in these areas driving up urea prices. Ammonium nitrate, which had been on a downward trend, is now showing signs of stability in price; some quotes have even increased. At present, most manufacturers are maintaining stable prices. The previous price cuts by certain large manufacturers were intended to encourage new orders. In Hubei province, the mainstream ex-factory price for 55% powdered ammonium nitrate remains around 2050 yuan per ton, with some high-end products priced at 2100 yuan and lower-end products around 2000 yuan. It is said that the actual ex-factory price for low-end products is 1950 yuan. Previously, the industry predicted that the price of low-end ammonium nitrate might drop to 1900 yuan, but that would only apply to certain transactions involving credit settlements. In recent days, the price of monoammonium has shown stability, and it is expected that prices at the lower end will rise in the future. The main reasons for this are as follows: First, demand is likely to gradually recover. Over the past two weeks, there have been rumors that a major trader has purchased tens of thousands of tons of ammonium nitrate in Hubei. Such news has brought some vitality to the market, where there have been few new orders recently; some industry insiders have paid more attention to ammonium nitrate. Last week, some factory representatives were pessimistic, suggesting that there was a risk of price drops for this product, but this week most companies say that the price of ammonium nitrate has remained stable. The prospect of a recovery in the price of monoammonium phosphate is mainly due to the approaching Spring Festival. In order to ensure the normal production of compound fertilizers during and after the festival, these companies stock up on monoammonium phosphate in advance. Additionally, with the resurgence of outbreaks of the virus in various regions this year, there is a concern that it might affect production and transportation; therefore, it is only logical for them to take precautions in advance. Secondly, favorable raw material market conditions. Previously, the author predicted that sulfur prices would exceed 1,000 yuan by the beginning of this year, and indeed, the prices of granular sulfur at the Yangtze River Port and Fangchenggang Port rose to around 1,060 yuan this week. The electronic trading price of sulfur also increased, and the price of sulfur produced at Puguang in China rose as well this week. This has boosted the confidence of those holding sulfur in the ports, who continue to expect further price increases. Currently, the prices at the Puguang Wanzhou Port and Dazhou production facilities have risen to 990 yuan and 900 yuan respectively. In the past few months, liquid ammonia has first seen an increase, followed by a slight decline and then stability; recently it has risen again, and by a significant margin. This is mainly due to reduced supply caused by gas restrictions and the shutdown plans of some factories. It is reported that the price of liquid ammonia in Sichuan and Chongqing has risen to over 4,000 yuan per unit at the factory exit. From this perspective, rising raw material costs provide some support for the steady increase in prices of monoammonium. Finally, Yian enterprises face little inventory pressure. The overall operating rate for monoammonium remains around 50%. Many companies still have pending orders that need to be fulfilled, with delivery typically possible until the end of January; in some cases, it can go on until February or March. As demand has increased recently, the number of pending orders is rising, but the sales pressure is not high. Additionally, these companies either have no inventory or only a small amount of it, so there is little inventory-related pressure, which provides a fundamental support for the monoammonium market. In summary, positive factors for monoammonium phosphate have been dominant recently. Although some in the industry believe that if its price does rise, the increase should not be significant, the price of monoammonium phosphate is likely to remain stable at least for now, with a possibility of a slight rise in the future. (Zhao Hongye)