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Urea prices soar, phosphate ammonium prices rise too; potassium fertilizers show the most unusual trend. Author/Source: China Fertilizer Network. Date: 2021-01-19. Clicks: 9. In recent days, urea has become the dominant factor, capturing the attention of all those in the fertilizer industry. Even rumors of intervention only served to act as a catalyst, failing to stop its prices from rising even further. Phosphatic ammonium is not left behind either; thanks to export demand, diammonium is in short supply and its price has risen, while monoammonium has once again stopped sales due to a shortage of stock. There’s nothing we can do; there’s really competition downstream! What’s going on here? So, how’s the potassium fertilizer? Data from Zhongfei Net shows that since hitting its bottom at the end of last July, urea has seen a price increase of around 400 yuan over the past six months as part of this upward trend. Currently, the ex-factory price of small-grained urea in Shandong Province has exceeded 2,000 yuan, while the price for large-grained urea is as high as 2,100 yuan. In the Northeast region, the ex-factory price of small-grained urea also ranges from 1,950 to 2,000 yuan. Compared to the same period last year, the current price of urea is 150-200 yuan higher. The price of diammonium reached its bottom back in May and June of last year, after which it began to rise steadily, just like a sesame plant blooming and growing taller step by step; to date, the increase in its price has been around 350%. Currently, the ex-factory price of 64% diammonium is between 2,400 and 2,500 yuan, which is 300 yuan higher than the same period last year. At the same time, the price of monoammonium is also about 200 yuan higher compared to the previous year. At first glance, the increases in nitrogen and phosphorus seem similar, but of the 400 yuan increase in urea over half a year, half of that increase occurred in just the past week; hence, many in the industry have described this rise as crazy. Currently, the average price for 62% white potash at ports is around 2100 yuan per ton (the same unit is used below); the average price for 62% white potash in Manzhouli is around 1900 yuan per ton, while the official delivery price for 60% potash from salt lakes is 2050 yuan per ton. Such a price is about 100 yuan lower compared to the same period last year. Yes, you’re not mistaken – it is lower! Fortunately, the price of potassium sulfate is over 100 yuan higher compared to the same period last year, so potash fertilizers have not been completely ruined. Taking the Shandong market as an example, based on current prices, the price of urea with a single nutrient content is 45 yuan, the price of diammonium phosphate is 40–41 yuan, while the price of potassium chloride is only 34–35 yuan. Is this still that potassium chloride which was collectively boycotted by downstream industries because of its lofty position? Is it still that single basic raw material whose importation plays a dominant role? The cheapest raw material is also the one with the worst market conditions; when something is abnormal, there must be a reason behind it! Firstly, despite the year-on-year decline, the price of potassium chloride had already risen significantly over a period of time earlier on; it increased by 400 yuan in just four months, from August to November. During this period of rising prices, downstream manufacturers had already purchased substantial inventory of raw materials, so there was no need or urgency to purchase more ； Secondly, before the recent sharp rise in prices of urea and similar products, over the course of more than a month, the prices of potassium chloride and potassium sulfate shifted from rising to stabilizing before experiencing a slight decline; confidence within the industry has already begun to wane ； Third, although the price of a single nutrient is low, its usage amount remains relatively small. In terms of supply, there are no problems at least in the short term. Additionally, although negotiations on large-scale contracts have not yet taken place, the industry generally believes that prices are unlikely to rise to the levels corresponding to the current prices. Therefore, considering various fundamental factors such as supply and demand, costs, and the market environment, there are no signs at present of a significant increase in the price of potassium chloride. The situation with potassium sulfate is similar: it is already in a off-season, and it no longer has the support provided by rising prices of potassium chloride. In addition, there is the threat of new production capacity coming online (the previous article mentioned that the planned new capacity was around 840,000 tons; recent information shows that this figure has now exceeded 1 million tons). Fortunately, prices were good in the earlier period, and there are many orders pending delivery. At present, there is no inventory pressure in the industry, so there won’t be much pressure in the short term. But is it the potassium fertilizer that’s abnormal, or are it the skyrocketing prices of urea and ammonium phosphate causing the problem? Everyone likely has different answers to this question. Anyway, as long as it doesn’t go crazy over there, there’s no reason for the potassium fertilizer to keep slipping away on its own, right? After all, there is no sign of a sharp rise in potassium fertilizer prices for now, nor is there any sign of a sharp drop. Put it another way, if nitrogen and phosphorus levels continue to rise, could potassium fertilizers have a good chance of seeing an increase as well? If nitrogen and phosphorus levels drop later on, then is it relatively safe to purchase potassium fertilizer, even though its price hasn’t increased recently? (Adu)