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September Monthly Report on the Compound Fertilizer Market Author/Source: China Fertilizer Network Date: 2016-10-09 Clicks: 6 This month, the pricing offered by compound fertilizer manufacturers remained generally stable, with only a few companies seeing slight price reductions, and the extent of these reductions was minimal. Currently, the prevailing ex-factory price for 45% Cl(15:15:15) compound fertilizer nationwide is around 1,650–1,800 yuan per ton (the same unit is used below), while the prevailing ex-factory price for 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. September is the month when demand for autumn fertilizers peaks. In the early part of September, demand began to emerge in various regions across the country. Due to previous environmental inspections, companies were not operating at full capacity and did not have sufficient inventory, which led to shortages in some areas; a few companies even had to wait in line for supplies. Gradually, the operational rate of these companies rose to around 71% ； In late September, the demand for autumn fertilizers in the Central Plains region, especially in provinces such as Shandong and Hebei, had reached around 70-80% of its annual level; there was not much additional demand later on. However, the late-season rice in regions such as Jiangsu, Anhui, and Hunan had not yet been harvested, and wheat planting would begin only in mid-October after the late-season rice was harvested. As a result, the demand for autumn fertilizers was delayed. In the latter part of September, most compound fertilizer manufacturers focused on supplying products to regions like Jiangsu and Anhui. Meanwhile, the demand for autumn fertilizers in the northern regions had already peaked. Additionally, on September 21st, five ministries including the Ministry of Transport issued regulations aimed at curbing the problem of oversized and overloaded freight vehicles. As a consequence, at the end of September, freight rates rose slightly, transportation became more constrained, and it became difficult for compound fertilizer manufacturers to sell their products. As a result, the overall production rate declined, with the overall production rate of compound fertilizers dropping to around 57% by the end of the month. Fertilizer manufacturers in the Northeast region have begun planning to purchase raw materials, with many intending to resume production after the 11th. Some companies have introduced interest-bearing payment plans for winter stockpiling, but collection rates have not been satisfactory. In terms of raw material costs: overall demand in the urea market is weak, and the impact of tenders issued in India is likely to be minimal as well. The overall production capacity utilization rate is low; some manufacturers have a slightly higher number of pending orders. The prevailing ex-plant prices remain stable across different regions, with only slight fluctuations in the prices offered by a few manufacturers. Demand in the downstream areas of Shandong is low, and manufacturers are operating at reduced capacity; the prevailing factory prices remain stable at 1190–1200 yuan ； The ammonium chloride market remains weak and stable; manufacturers face pressure in selling their products, and market activity is moderate. A factory in Henan region maintains steady export prices of 360 yuan for wet ammonium chloride and 410 yuan for dry ammonium chloride, with some orders allowing for price negotiations ； In Hubei region, the prevailing ex-plant price for 55% powdered monoammonium is currently stable at 1,550 yuan; the actual price upon delivery ranges from 1,500 to 1,550 yuan. There have been no large-scale transactions recently, with only occasional orders being fulfilled ； It is understood that many manufacturers in the Jingmen area of Hubei are planning to suspend production for maintenance due to weak demand and environmental inspections; currently some small factories have already stopped operating, while a few larger factories are working at full capacity for now, but they too will join the ranks of those suspending production in the future ； There are still no major changes in the potassium chloride market in the Qinghai region. There are still no new quotes or new policies regarding potash fertilizer from salt lakes; reportedly, there are no plans for price adjustments at the moment. The reference prices for domestic 60% crystalline potash fertilizer, as provided by agents, are around 1800 upon arrival at the destination ； The operating rate of Shandong Mannheim’s potassium sulfate production remains stable at around 80%. Following the decline in prices last week, there has been a temporary stabilization as well. The standard ex-plant price for 50% powder is 2150–2200 yuan, while the standard ex-plant prices for 50% granules and 52% powder are 2250–2350 yuan. Actual transactions generally take place at lower prices; larger orders can still be negotiated, but overall sales performance is not very good. Overall, the demand for fertilizers in autumn is coming to an end, with slight room for restocking in some areas. Raw material prices remain weak, and the pricing of compound fertilizers is expected to stay stable in the short term. Most companies plan to suspend production for maintenance work after mid-October, before resuming operations to prepare for the winter storage market.