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After potassium fertilizers, ammonium fertilizers take center stage; is it time to use compound fertilizers? Author/Source: China Fertilizer Network Date: 2021-04-25 Clicks: 7 Last week it was said that prices for Salt Lake’s products might rise, but this week it seems that there will be no increase in the price of potassium chloride produced by Salt Lake. This decision is based on the actual market conditions; the price of potassium chloride at ports has remained stable over the past half month, and demand for potassium chloride isn’t very strong. Therefore, raising prices by Salt Lake would be pointless. Recently, companies have faced restrictions on drying processes due to gas shortages; recovery was expected by the 15th, but it has not yet happened. This has directly affected the daily volume of shipments. Even so, the weakening demand is a fact, but the shortage of potassium chloride supplies is not likely to change in the short term. Therefore, prices are likely to remain high in the short term, with a possible decline in the second quarter. Fertilizer manufacturers have become indifferent to the rising prices of potassium chloride; moreover, with prices remaining stable or even possibly falling, large-scale purchases are unlikely. If there is an urgent need to restock, it is possible to purchase imported products depending on factors such as one’s geographical location. After potassium fertilizers, ammonium fertilizers took center stage. Previously, some in the industry thought that bulk purchases of ammonium fertilizers might have to wait until after May Day, but it turned out that this would happen about a week earlier than in previous years. It is reported that the total amount of ammonium fertilizers released in Hubei has already exceeded 200,000 tons; one of the major ammonium fertilizer manufacturers there received orders for 70,000 to 80,000 tons. Although there are reports that most of these purchases were made by traders, it is also known that several regular customers among the compound fertilizer manufacturers were involved as well. This move has caused the price of monoammonium phosphate to rise by around 50 yuan per ton. Many companies have stopped taking orders. It remains to be seen whether smaller and medium-sized compound fertilizer manufacturers will follow suit and make purchases as well. In fact, some companies in regions such as Shandong have already purchased thousands of tons of monoammonium phosphate. In the short term, if purchases are not made promptly, not only will prices rise, but there may also be a shortage of available stock in the market. Some companies currently believe that this price increase is driven by joint purchasing efforts on the part of traders. However, considering the previous supply situation of monoammonium, companies still have orders to fulfill in the near future, and many in the industry are optimistic about the international export market in the future; therefore, an increase in the price of monoammonium is somewhat understandable. Centralized procurement has led to an increase in the price of monoammonium phosphate; the recent rise in urea prices is mainly due to demand for high-nitrogen fertilizers and expectations regarding tenders in India. By the fourth week of April, the purchase price of urea at compound fertilizer factories in Linyi, Shandong, had risen to over 2,200 yuan per ton, with high production levels continuing. There are still some negative factors in the market ahead, so the room for further increases in urea prices is likely limited. However, it cannot be ruled out that factors such as tenders in India around the end of the month could lead to higher urea prices. In short, there is a low likelihood of price drops in the short term, and compound fertilizer companies have increased their purchasing activity compared to before. This year, the spring market for compound fertilizers has not been as favorable as expected. Demand for compound fertilizers is gradually increasing in the summer, with high-nitrogen fertilizers being the most sought after; their prices are largely determined by the trends in urea prices. Demand for monoammonium phosphate and potassium fertilizers is relatively low. However, if overall raw material prices remain stable or rise, it will make it easier to develop the compound fertilizer market. Although end-users are unwilling to pay high prices, this could still help improve the sluggish market conditions. Compound fertilizer manufacturers will purchase raw materials according to their needs, buying urea in multiple shipments as required, purchasing monoammonium phosphate in bulk more frequently, and replenishing potassium fertilizers as needed. (Zhao Hongye)