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Most of the spring season has passed – can Yian still fight one more battle? _ Author/Source: China Fertilizer Network Date: 2021-04-15 Clicks: 2 The pricing for ammonium phosphate has remained stable for some time now, with some artificially high prices having dropped. The premium outlet price for 55% powdered ammonium phosphate in Hubei has fallen by 50 yuan (per ton) to 2,550 yuan. Although most factories have not adjusted their prices, the actual transaction prices have changed. It is reported that large factories in Hubei are selling 55% powdered ammonium phosphate at an actual price of 2,450 yuan, indicating a price reduction. Last month, these factories sold it at 2,520 yuan. In the market, there are even cases where prices are lower than the standard rate; for example, major traders at the Bayuquan port are selling 55% powdered ammonium phosphate at 2,400 yuan or slightly less. Northeastern compound fertilizer manufacturers also have excess raw materials to sell, with the selling price for 55% powdered ammonium phosphate being around 2,500 yuan. It is evident that there are signs of a price drop for monoammonium; although the supply available on the market was purchased at low prices earlier on, the fact that the price of monoammonium has inverted cannot be denied. There are probably several reasons that could lead to a decrease in the price of monoammonium From a supply perspective, the operating rate of ammonium nitrate production facilities has remained high; currently, the overall operating rate across the country is above 60%. Although it is currently the annual maintenance period for these facilities, many companies are eager to meet export and domestic orders, and therefore adopt a strategy of rotating the maintenance of their plants – only a few smaller factories suspend operations for maintenance. As a result, the overall operating rate of ammonium nitrate production facilities remains relatively high. Some companies still have enough pending orders to last for a while, but others have few such orders left. This is especially true for companies that produce only ammonium phosphate; in the short term, there is not much pressure on their inventory levels. However, in the long run, if demand does not improve, these companies will face greater inventory pressures. This brings us to the demand side for monoammonium. Recently, demand for spring compound fertilizers has declined, and the market for summer fertilizers is progressing slowly; as a result, sales for compound fertilizer manufacturers have not been satisfactory. Manufacturers generally maintain firm pricing, though some are willing to offer slight discounts for transactions. Compound fertilizer manufacturers are seeing poor sales of their finished products, which makes them cautious about purchasing raw materials. As demand is low in the Northeast region and there is an excess of raw materials, these companies are currently selling ammonium phosphate. The selling price of ammonium phosphate at the Bayuquan port is also decreasing. It is reported that sales in the Northeast are not satisfactory, and compound fertilizer manufacturers in other regions have also been less active in making purchases recently. It is estimated that large compound fertilizer producers and traders may start making purchases ahead of schedule in the latter part of this month or around May Day, which could prompt other compound fertilizer manufacturers to follow suit and make purchases as well. Such situations still require analysis on a case-by-case basis. Recently, some industry insiders have been paying attention to new orders for ammonium phosphate exports. Internationally, there are tenders for phosphatic fertilizers in India and Bangladesh, but diammonium phosphate and heavy calcium carbonate account for a larger proportion in these tenders, while the amount of ammonium phosphate is relatively small. Brazilian importers are hesitant and unwilling to build up large inventory levels before market prices drop. Moreover, activities in the local inland areas have slowed down significantly, with distributors at all levels adopting a wait-and-see attitude; as a result, the demand for China’s ammonium phosphate exports has also gradually declined. Although the upward trend in sulfur prices, which had remained stable for some time, brought certain benefits to monoammonium sulfate, the overall market situation for this product still depends primarily on supply and demand factors. In the short term, monoammonium sulfate can still maintain strong pricing, but if demand does not show significant improvement, a downward price trend is likely to emerge. (Zhao Hongye)