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Surge in exports; ammonium phosphate prices expected to rise again after the festival. Author/Source: China Fertilizer Network. Date: 2021-02-18. Clicks: 7. The Spring Festival holiday is coming to an end, and the fertilizer market will gradually return to its usual level of activity after a brief pause. Ahead of the festival, prices of urea and ammonium phosphate rose due to international market trends; in particular, urea prices saw a sharp increase. Compared to the relatively calm market conditions before the Spring Festival in previous years, urea was quite active this time. As of before the festival, compound fertilizer manufacturers in Linyi, Shandong, were offering prices for urea ranging from 2120–2130 yuan per ton, with prices reaching up to 2150 yuan before the festival. Diammonium phosphate is not far behind; currently, the offshore price of 64% diammonium phosphate in China has exceeded $500. It is expected that prices will continue to rise. Driven by international market conditions, companies producing diammonium phosphate are raising their prices, and at present the delivery price of 64% diammonium phosphate in Heilongjiang is around 3,000 yuan. How is the export situation for monoammonium? As of the first week of February, the FOB price of 55% granular monoammonium phosphate in China was between $400 and $420, representing an increase of $20 to $40 compared to the end of January. Prices for monoammonium phosphate have continued to rise; recently, it was reported that a large factory in Sichuan placed an order for 30,000 tons of 55% granular monoammonium phosphate, with an FOB price of $440, and the shipment was scheduled for late April to Brazil. When converted to the price at the port of arrival, this amount reaches around 2800 yuan. Even before the festival, the domestic factory price for 55% granular ammonium nitrate in Sichuan was already 2350 yuan, which shows that the export price is much higher than the domestic price. Although some in the industry claim that this price is just an exception and that the goods have been available for sale for a long time, there are already few companies in China capable of producing granular ammonium nitrate, and supplies of such products are already tight. It is reported that large manufacturers in Anhui have orders ready for export that can be fulfilled until the end of May; therefore, it is likely that export prices will continue to rise in the short term. Rising export prices also drive up the prices of domestic ammonium nitrate. It is reported that companies that had not been producing granular ammonium nitrate for some time have started to do so due to improved export conditions; this has reduced the production of domestic powdered ammonium nitrate and industrial-grade ammonium nitrate to some extent, which is beneficial for the domestic ammonium nitrate market. Before the festival, there was a shortage of spot supplies of powdered ammonium nitrate in China, especially 55% powdered ammonium nitrate. Large manufacturers in regions such as Hubei did not provide quotes and suspended taking on new orders, focusing instead on fulfilling existing orders. Although companies in other regions did offer some quotes, they also limited the number of orders they accepted. Companies had fewer maintenance periods in 2020. The industry speculates that if market conditions are poor, some ammonium sulfate producers will reduce production to carry out maintenance work. However, due to the large volume of orders pending, companies continued to operate at full capacity during the Spring Festival; even if market conditions deteriorated later on, they wouldn’t face much pressure and would have time to carry out maintenance. It is evident that there is no immediate sales pressure on the company. Coupled with the improvement in raw material prices, there is a high likelihood of an increase in the price of monoammonium phosphate after the holiday. After a prolonged period of weakness, sulfur has seen a strong rebound. By the time of the Spring Festival holiday, the prices at Puguang Wanzhou Port and the Dazhou plant had risen to 1300 yuan and 1100 yuan respectively, while the price of granular sulfur at the Yangtze River Port had reached around 1370 yuan – an increase of over 150 yuan compared to the prices at the beginning of February. This indicates that port holders still have considerable confidence in sulfur prices. Coupled with the price increases in Puguang domestically, there is a possibility that sulfur prices will continue to rise after the festival. Although domestic demand is slightly weaker, after the holiday, as ammonium sulfate manufacturers begin to issue new quotes and take on new orders, downstream compound fertilizer companies are likely to have certain purchasing plans. In particular, in order to support spring plowing, those companies that did not purchase enough compound fertilizer earlier will start making new purchases after the holiday. In summary, supported by positive factors such as exports, the price of monoammonium phosphate is likely to continue rising after the holiday, with prices particularly expected to increase compared to before the holiday. (Zhao Hongye)