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Taking advantage of rising nitrogen and phosphorus prices – is replenishment of compound fertilizers underway? Author/Source: China Fertilizer Network Date: 2020-06-01 Clicks: 4 By the end of May, the fertilizer market entered a slack season. At the beginning of June, wheat was about to be harvested in some areas, and corn planting began, which meant that demand for fertilizers for corn would increase. Therefore, this period should see the final wave of sales of corn fertilizers. However, fluctuations in raw material prices, especially the slight rise in the prices of urea and ammonium nitrate, provided some support for this final wave of sales of high-nitrogen corn fertilizers. Firstly, the slight increase in urea prices has, to some extent, prevented a decline in the prices of high-nitrogen compound fertilizers. Since India’s tender was issued in May, urea prices have been pushed down to low levels. In mid-May, the ex-factory price of small-grained urea in Inner Mongolia was around 1430–1450 yuan per ton. As prices were at their lowest levels, purchases by both industrial and agricultural sectors began, including those by compound fertilizer manufacturers as well as by farmers at the grassroots level. Soon after, domestic urea prices saw a slight rebound, rising by 100 yuan per ton so far. Currently, the ex-factory price of small-grained urea in Shandong Province has risen to around 1620 yuan per ton. However, given the limited demand still existing, there is limited room for further price increases. Nevertheless, this slight recovery in urea prices provides some support for replenishing stockpiles in the high-nitrogen fertilizer market, and the degree of price decline isn’t that severe. Secondly, the price of monoammonium phosphate has rebounded. Although the slight increase in the price of monoammonium may not be closely related to the demand for compound fertilizers in the first half of the year, the rise in raw material prices does contribute to increasing the cost of compound fertilizer products. In particular, due to the recent slight increase in sulfur prices, the prices of Puguang sulfur at the Wanzhou Port and Dazhou plant rose by 30 yuan per ton this week, reaching 660 yuan per ton and 560 yuan per ton respectively, while the prices of granular sulfur at the Yangtze River Port and Fangchenggang Port remained stable at 665 yuan per ton. At the same time, compound fertilizer manufacturers are also preparing for the production of fertilizers for autumn wheat; some of them have begun to purchase ammonium sulfate as a raw material, which explains the rise in the price of ammonium sulfate. Once again, corn fertilization begins in early June – how much demand remains for the final phase? According to research by China Fertilizer Network, the demand for corn fertilizers across the country in the first half of the year is nearing its end; the amount of fertilizer stockpiled by end-users accounts for around 70-80% of the total demand, leaving only a small amount of room for further purchases. Additionally, the prices of some raw materials remain stable, and there is still some demand in the market. Although composite fertilizer prices dropped significantly at this time last year, the decline this year has been slow and limited. Finally, the price trend of compound fertilizers is expected to remain stable but weak in the coming period; a gradual decline or stability will be the dominant pattern. After June, more attention will focus on market operations and production related to fertilizers for the autumn season in the second half of the year.