Weekly Report on the Compound Fertilizer Market, Second Week of September 2016

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Weekly Report on the Compound Fertilizer Market for the Second Week of September Author/Source: China Fertilizer Network Date: 2016-09-12 Clicks: 7 This week, the pricing offered by compound fertilizer manufacturers continued to decline steadily, with a few companies reducing their prices slightly. Currently, the mainstream ex-factory price of 45% Cl(15:15:15) compound fertilizer nationwide is around 1,650–1,800 yuan per ton (the same unit is used thereafter), while the mainstream ex-factory price of 45% S(15:15:15) compound fertilizer is around 1,900–2,100 yuan per ton. The majority of factory quotes for 45%Cl (25:13:7) and (18:22:5) are around 1700–1850. The demand for autumn fertilizers surged suddenly. Due to the persistently low prices of raw materials, most compound fertilizer manufacturers did not have sufficient stockpiles of both raw materials and finished products. Additionally, as a result of previous environmental regulations, manufacturing capacity had only just begun to recover, and it was not yet ready to meet the rising demand. As a result, there was a shortage of autumn fertilizers in certain areas of Central China; some companies even had customers waiting in line to purchase their products. However, some companies still offered high prices, resulting in few orders and slow sales. Thus, there is a significant disparity in the compound fertilizer market – some companies are doing well in terms of shipments, while others had decent shipments in the past but are now facing delays. As a consequence, they have been forced to lower their prices slightly, and their production rates have also declined. Currently, the overall production rate for compound fertilizers is around 63%. At present, the distribution rate of autumn fertilizers in the downstream market has reached around 70%; it is expected that only a small amount of replenishment will be needed in the future. The strong demand for autumn fertilizers will also gradually subside after September 20th. In terms of raw material costs: agricultural demand for urea is low, with only a few regions’ downstream distributors starting to stock up on fertilizers. Industrial compound fertilizer manufacturers are seeing stable orders, and the overall utilization rate of urea plants is low. Sales of urea have improved in most regions; after prices rose, there was a slight further increase in prices in a few regions. The Shandong region continues to supply mainly industrial compound fertilizer plants, with stable sales performance; the standard factory price remains at 1190–1200 yuan, though deals can sometimes be made at a price 20 yuan lower ； The ammonium chloride market is operating steadily; sales volumes are relatively low for most manufacturers, and some individual manufacturers have reduced their prices in a reasonable manner. A plant in the Tianjin area has limited production capacity for ammonium chloride, and it is planned to carry out maintenance for 1–2 weeks starting on the 10th, which puts pressure on sales volumes; as a result, the export price has dropped by 20 yuan to 430 yuan ； The market for monoammonium phosphate remains sluggish; companies are having difficulty securing new orders. There is a shortage of transport vehicles in some areas. Currently, the mainstream ex-factory price for powdered monoammonium phosphate across the country remains stable at 1550–1650 yuan, while the price for low-quality products in Hubei is around 1500 yuan on a cash basis ； The price of potassium chloride in the Qinghai region remains unclear. It is understood that currently, the wholesale prices for 57% powder range from 1600 to 1650 yuan; higher-quality products with lower moisture content and guaranteed prices are available as well ； The market situation for potassium sulfate is not as good as it was earlier, with prices declining gradually in various regions. In the southwest region, the operating rate of manufacturers of Mannheim potassium sulfate has dropped from over 60% to around 50% due to poor sales (including of the by-product hydrochloric acid). Currently, the standard factory price for 50% purity powder is artificially high, at 2200–2250 yuan, while the actual transaction price is around 2100 yuan. Overall, in terms of raw materials, only the price of nitrogen fertilizer raw materials has seen a slight increase, while the prices of phosphate and potassium fertilizers have remained stable or declined slightly. The cost support for compound fertilizers remains weak. However, it is the peak season for demand for fertilizers in autumn; therefore, companies are maintaining their pricing levels, with only slight decreases in the premium segment. It is expected that sales of fertilizers will continue until around September 20, and there won’t be significant fluctuations in prices in the short term.