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Wishing a prosperous start to the new year; DAP takes the lead. Author/Source: China Fertilizer Network. Date: February 23, 2021. Views: 2. The festive atmosphere has not yet completely faded away. To ensure the smooth progress of spring plowing and the safe use of fertilizers by farmers at the grassroots level, those working in the fertilizer industry have gotten an early start on their work for the new year. It is said that the best time of the year for planning is in spring, and we always seek good luck when doing anything, hoping for a positive start. This year, the fertilizer market is quite in line with this trend: prices of nitrogen, phosphorus, potassium, and compound fertilizers have all risen. Diammonium phosphate stands out among them. With the ongoing rise in international prices, the offshore price of 64% diammonium phosphate in China has surged to $520–545 per ton (the same unit applies below). Domestic prices at some factories have also increased; the export price of 64% diammonium phosphate from a major factory in Yunnan is as high as 3,050 yuan per ton. Diammonium has a significant advantage at the beginning of the spring market; will it maintain its strong performance going forward? First of all, prices are rising internationally. During the Spring Festival holiday, the international market remained volatile. Prices of DAP continued to rise in South Asia and the Americas. News that some ammonium phosphate plants in India are expected to remain shut down until late February due to a shortage of raw materials once again came to the attention of those in the fertilizer industry. This means that India’s already limited domestic production will be further reduced, thereby increasing the international market’s reliance on China. Given the limited supply of goods available in countries such as Morocco, Saudi Arabia, and Tunisia, it is not surprising that the prices for new orders placed by China’s diammonium phosphate manufacturers are high. At present, the premium price for 64% diammonium phosphate in China is already close to $550, a level that is near the international premium price; therefore, another significant increase in prices in the short term is unlikely. Secondly, the domestic market has reached a stalemate. Entering February, although international prices were higher than domestic prices, in order to ensure the progress of spring plowing and fulfill previously signed contracts, most diammonium phosphate factories increased their domestic supply. Taking the Northeast region as an example, the volume of goods available on the market after the holiday had reached nearly 60% of normal levels. Although it remains slightly below previous years’ levels, considering the remaining orders pending fulfillment at the diammonium plants, the shortfall in the spring market is lower than expected. With significant increases in export prices and ammonium diammonium enterprises having no shortage of orders, domestic prices have followed closely behind export prices. However, just after the Spring Festival holiday, some downstream distributors were still immersed in the festive atmosphere, and coupled with this significant increase in prices, the market entered a brief period of stagnation. However, the shortfall in the domestic spring market going forward is not significant, and even if prices remain high, the impact on retail sales in the market will be limited. Finally, raw material prices are subject to constant fluctuations. As mentioned several times earlier, international prices for phosphatic ammonium are high, and they are expected to remain at these high levels in the coming period. Sulfur, being the main raw material used in the production of phosphatic ammonium and also the only material that China still needs to import in large quantities, is naturally affected by international market conditions. Upon returning after the holiday, while people were focusing on the prices of finished products such as urea and ammonium phosphate, the price of granular sulfur at the Yangtze River Port had already reached 1,470 yuan. Most traders holding inventory are optimistic about future market trends, and there is a high likelihood that sulfur prices will continue to rise. The price of liquid ammonia has dropped from its peak level before the holiday; the price of liquid ammonia arriving in Hubei is around 3,000 yuan. Raw material prices are subject to constant fluctuations. Although the production costs for high-end products in Hubei region have already exceeded 2,500 yuan, these costs still fall short of the higher pricing levels set by enterprises after the holiday. In summary, there is still a significant price gap as well as strong market demand both domestically and internationally; companies also have many orders pending fulfillment, which means prices will remain high in the coming period. (Rong Guangwen)