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Urea prices show a tendency to decline, while prices of monoammonium nitrate remain stable or rise. Author/Source: China Fertilizer Network Date: 2020-07-16 Clicks: 5 The agricultural demand for urea has essentially come to an end; although there is still industrial demand, the overall situation remains unfavorable. At present, urea manufacturers in areas such as Shandong’s Lianghe region are maintaining relatively stable prices. Today, the price of urea supplied to compound fertilizer manufacturers in Linyi remains stable at around 1640–1670 yuan per ton. Urena production facilities that were shut down recently will resume operation, which will increase the overall supply of urea. Additionally, urea from regions such as Inner Mongolia is entering the market at low prices, so it is expected that urea prices may drop. In the later stage, attention will also need to be paid to the impact of export prices on the atmosphere in China’s urea market. Urea seems to be on a downward trend, while monoammonium phosphate is not. Although it isn’t at the same high level as before, its market price remains stable. Currently, companies are maintaining relatively firm pricing: in Hubei, the standard ex-factory price for 55% powdered monoammonium phosphate is between 1850 and 1900 yuan, while the actual price upon delivery is around 1800–1850 yuan. Large manufacturers in Sichuan offer an ex-factory price of 1800 yuan for 55% powdered monoammonium phosphate, while smaller manufacturers in Yunnan and Guizhou charge 1700 yuan for the same product; prices can be negotiated upon transaction. So why is monoammonium holding strong? What are the positive factors? First of all, the pressure on companies is not high. Due to the pandemic this year, companies’ existing inventory was almost exhausted. After taking on an appropriate amount of orders, ammonia producers adopted a strategy of limiting new orders, resulting in low inventory levels. The focus was on fulfilling existing orders, especially those from companies in Hubei, the main production region; their advantages in terms of quality and transportation ensured a steady stream of orders for these companies. At present, the number of orders awaiting fulfillment can be met until mid-to-late August, after which companies will release more orders in stages while continuing to control new orders, so there is no significant inventory pressure in the short term. Recently, the overall operating rate of monoammonium has remained at a relatively low level, around 50%, with little change; there is no likelihood of a significant increase in the short term. Secondly, there are still subsequent hard requirements. It has been learned recently that although the purchasing activity by compound fertilizer manufacturers has slowed down slightly, there is still a certain demand in the future. For example, a large factory in Shandong still has a demand gap of around 20,000 tons before October; purchases have slowed down only because existing inventory and goods awaiting shipment can cover needs for some time. Large factories in Hebei have a demand for about 2,000–3,000 tons of ammonium phosphate each in August and September, with purchases being made in batches rather than in large quantities all at once. Additionally, it is still early before the actual time for applying fertilizers in autumn; even though the policies regarding fertilizer use in autumn are now largely clear, downstream distributors have not yet made large-scale purchases for stockpiling. A moderate level of purchases is being made at present. Sales of high-demand compound fertilizers have been relatively good recently, while sales of other types of compound fertilizers remain weak. However, as time goes by and the downstream market starts to activate again from mid-August to early September, fertilizer manufacturers will gradually begin to make regular purchases of ammonium nitrogen fertilizers as well. In terms of supply and demand, the situation is relatively more favorable. However, there have been short-term negative factors affecting demand recently; as fertilizer manufacturers made purchases in advance, their inventory of ammonium nitrate as well as the amount of ammonium nitrate ready for shipment was sufficient to sustain normal production of compound fertilizers for some time. Additionally, ammonium nitrate producers in regions such as Hubei have been controlling new orders, which has led fertilizer manufacturers to adopt a cautious approach in the short term, resulting in slightly lower demand over the past few weeks. Recently, there have been negative factors related to raw materials, but their impact is limited. Stock levels at Sulfur Port have been rising gradually, and there are many shipments arriving recently; as a result, the atmosphere in the port market is negative and prices have fallen. Currently, the price of granular sulfur at ports such as the Yangtze River Port is 625 yuan, while the prices at Puguang Wanzhou Port and the Dazhou plant are 660 yuan and 600 yuan respectively. However, changes in sulfur prices have little impact on the price of ammonium sulfate given the supply and demand dynamics for this product. For every 100-yuan drop in sulfur prices, the price of 55% powdered ammonium sulfate drops by around 46 yuan. Therefore, with recent adjustments in sulfur prices ranging only from 5 to 10 yuan, these changes will not have a significant impact on the price of ammonium sulfate for now. Overall, the positive factors for monoammonium phosphate remain dominant; it is expected that the market for this product will remain stable in the short term, with prices likely to continue to rise gradually. (Zhao Hongye)