Summary Post on the Market Conditions and Prices of Compound Fertilizers in December 2016

Some companies have introduced policies for winter stockpiling, which could lead to an increase in the prices of compound fertilizers. Author/Source: China Agri-Materials Network Date: 2016-12-01 Clicks: 13 Products that have seen significant price increases in the past half month include natural gas (New York spot price, 31.1%), glycine (Hebei, 18.89%), pure benzene (East China region, 18.26%), crude salt (East China region, 18.18%), caprolactam (China Fiber Network, 16.88%), natural rubber (Shanghai, 16.3%), polymeric MDI (Yantai Wanhua, 13.57%), styrene-butadiene rubber (East China region, 13.09%), synthetic ammonia (Shandong, 12.5%), and propylene (East China region, 12.5%). 　　 　　Products that have seen significant price drops in the past half month: liquid chlorine (East China region, -20%), melamine (Sichuan Huahua Qinghua, -12.94%), propylene international (CFR Southeast Asia, -11.7%), compound fertilizer (Staley 45%, -11.36%), epichlorohydrin (East China region, -8.7%), polyester DTY (Zhongxianwang, -7.07%), potassium chloride (Qinghai Yanqiao, -6.67%), liquefied gas (Shanghai Petrochemical, -4.35%), xylene (East China region, -3.9%), International Ammonium (Baltic Sea, -3.73%). 　　 　　Investment outlook: In 2016, supply-side reform will be a key focus of the capital market. Major measures such as reducing overcapacity and addressing real estate inventory will provide continuous investment opportunities for the chemical industry. From three perspectives—rising raw material costs, strong demand, and supply constraints—we have identified investment opportunities in the chemical industry. Specifically: 1) The increase in raw material prices is driving up prices of downstream products. We recommend paying attention to PTA (Hengyi Petrochemical, Rongsheng Petrochemical), viscose staple fiber (Sanyou Chemical, Nanjing Chemical Fiber, Xinxiang Chemical Fiber, Aoyang Technology), and coal chemical industry firms (Yili Clean Energy, Hongda Xingye, Hualu-Hengsheng). 2. As real estate inventories are reduced, growing investment demand is likely to boost the demand for upstream building materials; companies such as those involved in the production of soda ash, glass, PVC, and MDI (Jinjing Technology, Sanyou Chemical, Hongda Xingye, Zhongtai Chemical, Wanhua Chemical) deserve attention. 3. Eliminate outdated production capacity and shut down polluting enterprises; as the supply side is affected, leading companies with competitive advantages will benefit. It is recommended to pay attention to the printing and dyeing industry (Lianfa Shares) and the dye industry (Luntu Shares, Zhejiang Longsheng). Some companies have introduced winter storage policies, and prices of compound fertilizers are likely to rise; it is recommended to pay attention to the relevant stocks. 　　 　　We continue to recommend companies with outstanding fundamental strengths and secure growth prospects, such as: 　　　Sailun Jinyu: It is facing significant historical development opportunities as the domestic market for replacing semi-steel tires begins to expand. As a leading domestic tire manufacturer specializing in semi-steel tires, if the company can seize this historic opportunity, it has the potential to become a domestically produced tire brand with international competitiveness. Furthermore, the profits generated by Vietnamese factories next year will help the company return to a path of high growth; it is highly recommended. Juhua Co., Ltd.: It boasts a strong technical foundation and robust R&D capabilities; as new products and technologies reach their maturity stage, it is poised to become a leader in the fields of electronic chemicals and new materials. Highly recommended. Hailide: All of its business segments are performing well; it enjoys strong organic growth. Its performance has exceeded market expectations. With numerous projects in the pipeline, it has ample momentum for continued growth. We continue to highly recommend it. Huilong Co., Ltd.: With years of experience in the agricultural inputs sector and significant channel advantages, channel management will be the key competitive advantage in the future of e-commerce for agricultural inputs. Considering the value of its channels, the company is significantly undervalued; it is highly recommended. Qingdao Double Star: Using tire O2O as a entry point, it implements a multi-level “Star-Monkey” strategy to establish a rapid-response aftermarket service system. It continues to be highly recommended. Hongda Xingye: It boasts significant advantages in the integrated circular economy within the chlor-alkali industry chain. Meanwhile, it is actively expanding into the rare earth new materials and soil remediation industries. It is recommended to pay close attention to this company.

Operation of phosphorus ore processing in Sichuan region. Author/Source: Date: 12-01-2016. Clicks: 12. The processing of phosphorus ore in Sichuan region shows no improvement in sales in the downstream phosphatic ammonium market; dealers face instability in obtaining supplies. Mining companies continue to ship goods to their regular customers as usual, with little change in actual transaction volumes. Overall, trading is sluggish. In terms of prices: the tax-inclusive price at the mine site for phosphorus ore with a purity of 27% is 190 yuan per ton, while that for ore with a purity of 28% is 220 yuan per ton； The delivery price at the county town for phosphorus ore with a purity of 26% is 190 yuan per ton (including taxes); for ore with a purity of 27%, the price is 210 yuan per ton. The delivery price at the county town for ore with a purity of 28% is 230 yuan per ton. Some mining companies charge 355 yuan per ton for ore with a purity of 28% when shipping it to Hubei. It is expected that phosphate rock market prices will remain stable in the short term. 　　The Southern Mine in Mabian, Sichuan, supplies phosphorus concentrate of 30%-32% quality. The phosphorus mine produces over 2,000 tons of raw ore per day, which is mainly supplied within Sichuan with some being sent to Hubei; sales have been moderate recently. For concentrate of 31% quality, the delivery price in Mabian County is 350 yuan per ton, while the price when delivered on a train car is 400 yuan per ton. For concentrate of 32% quality, the price at the Mabian warehouse is 365 yuan per ton, and the price when delivered on a train car is 415 yuan per ton; prices are subject to negotiation. (China Business Network)

Policy benefits are being unleashed at full speed! The momentum of organic fertilizers is unstoppable! Author/Source: Date: 2016-12-02 Click-through rate: 59 Recently, the third meeting of the Working Group on Promoting Pollution Prevention and Control in Agriculture was convened to discuss and arrange the key tasks for 2017, as well as actions aimed at replacing chemical fertilizers with organic fertilizers for fruits, vegetables, and tea. Relevant policy documents will be released soon. In response, Professor Shen Qirong from Nanjing Agricultural University said, “Replacing chemical fertilizers with organic fertilizers in fruit, vegetable, and tea cultivation not only leads to significant cost savings and improved efficiency, but it also helps to enhance product quality and promote the reuse of agricultural waste resources – it’s a win-win situation.” ” 　　Policy support: Continuous benefits 　Since the 1980s, organic fertilizers have gradually come into people’s attention. With the development of domestic industry and an increasing awareness of environmental protection, domestic organic fertilizer enterprises have grown to considerable scale. Compared to chemical fertilizers, **the preference for organic fertilizers undoubtedly acts as a boost for the entire industry. 　　For a long time, the Ministry of Agriculture has introduced various policies to promote the use of organic fertilizers, urging farmers to adopt them. As early as during the 12th Five-Year Plan period, when interpreting the “National Modern Agriculture Development Plan (2011–2015)”, Chen Mengshan, then Chief Agronomist of the Ministry of Agriculture, stated that the use of organic fertilizers is crucial for improving soil quality. We have set a red line and minimum threshold to ensure that 160 million mu of the total 180 million mu of arable land is used for grain cultivation; however, it is insufficient to focus solely on the quantity of arable land. Greater attention must also be paid to its quality—that is, how to promote the use of organic fertilizers. 　　In order to facilitate the implementation of the VAT policies related to organic fertilizer products, on December 1, 2015, the **State Taxation Administration issued the \"Notice by the Ministry of Finance and the **State Taxation Administration on Exempting Organic Fertilizer Products from VAT\" (Caishui [2008] No. 56). This notice stipulated that organic fertilizers falling under the VAT exemption policy should comply with the standards set out in \"Organic Fertilizers\" (NY525—2012); organic-inorganic compound fertilizers should adhere to the standards specified in \"Organic-Inorganic Compound Fertilizers\" (GB18877—2009); and bio-organic fertilizers should meet the standards outlined in \"Bio-Organic Fertilizers\" (NY884—2012). 　　Organic fertilizer products that do not meet the above standards are not eligible for the VAT exemption policy. 　　Cakes are attractive: The market value is expected to exceed 190 billion in 2020. Organic fertilizers have broad prospects in China and represent a high-potential emerging industry. Data shows that there are currently around 2,283 organic fertilizer manufacturers across the country, with a total production capacity of 34.83 million tons, accounting for only about 20% of the total amount of fertilizers used. The Industry Research Center of CIC Consulting predicts that the use of organic fertilizers will continue to grow at a rapid pace over the next five years. The compound annual growth rate of the industry’s market size is expected to be in the range of 15%-20%, with an estimated value of 17.5%. By 2020, the market size of this industry is likely to exceed 190 billion yuan. 　　Considering the development requirements and trends of the organic fertilizer industry, Shen Qirong suggested that fertilizer enterprises should focus on the research, development, and promotion of fully integrated biological organic fertilizers. It can provide sufficient nutrients for the crops of the current season, thereby increasing their yield ； It can also improve the microbial community in the soil and enhance soil fertility, achieving a two-fold benefit from a single application. 　　In an industry where chemical fertilizers are facing a downturn, organic fertilizers represent a tempting opportunity. Organic fertilizer products, represented by biofertilizers and bio-organic fertilizers, hold great market potential. For a considerable period of time, this will become a new growth point for the fertilizer industry. 　　Faced with the surge in organic fertilizer companies, Shen Qirong warned that the development of this industry should focus on setting appropriate entry requirements for manufacturers, taking into account factors such as resources, technology, and production capacity, so as to prevent companies that lack the necessary capabilities from damaging the overall reputation of this emerging industry. (Global Network Economy)

Will phosphate fertilizers rise in price too? Author/Source: Agricultural Inputs News Agency. Date: 2016-12-06. Clicks: 14. The phosphate fertilizer market continues to see price increases. Driven by continuing rises in raw material prices, the price of monoammonium nitrogen is seeing upward pressure ； Companies receive a large volume of advance orders ； Low operating rates have led to supply constraints, with no sales pressure in the short term. The diammonium market has remained relatively stable, with companies expecting price increases. 　　From November 21st to 27th, the domestic price of monoammonium nitrate remained high. Companies had already scheduled all their orders for mid-to-late December, leaving little room for new orders. Larger manufacturers have stopped accepting orders and providing quotes, while small and medium-sized enterprises that are still operating only take on minor orders. Inspections for overloaded shipments are strict, and there is a shortage of vehicles for dispatch. Last week, the average ex-plant price for 55% powdered monoammonium was 1,657 yuan per ton (the same unit is used hereafter), representing a 2.28% increase on a month-on-month basis ； The average wholesale price is 1,800 yuan, up 2.86% on a month-on-month basis. 　　The company has a large backlog of orders and is not in a hurry to take on new ones. High sulfur prices and rising prices of synthetic ammonia have provided strong support for the increase in the price of monoammonium nitrate. Transportation by road and rail in major production areas such as Hubei, Sichuan, Yunnan, and Guizhou is under strain, resulting in significant pressure to ship goods out. It is expected that the price of monoammonium will remain high in the near term; prices for small, sporadic orders will continue to rise slightly but at a slower pace. 　　Diammonium: Last Tuesday, the price of ammonium saw slight fluctuations; manufacturers had low profit margins, which gave them a strong willingness to maintain high prices. Supported by factors such as rising raw material prices, manufacturers are inclined to hold prices high in anticipation of further increases; some have attempted modest price hikes, but dealers show little enthusiasm for purchasing, resulting in limited transaction volume. Domestically, the average ex-factory price of DAP is 2,025 yuan, while the average wholesale price is 2,275 yuan; both figures have seen a slight increase compared to the previous week. 　　Industry experts believe that demand for winter storage is unlikely to see significant improvement in the short term, and manufacturers have no intention of reducing prices to boost sales. It is expected that a stalemate will persist between supply and demand in the market in the near future, with stable market conditions being the most likely outcome. 　　The rise in prices of phosphate fertilizers in China will undoubtedly help Saudi producers raise the prices of their exports to the Pakistani and East African markets. However, this current increase in prices is unlikely to persist. One of the reasons is that Pakistan’s demand for imported diammonium phosphate disappeared rapidly; the purchases by the country’s two main importers could only continue until the first week of December ； Secondly, some industry insiders speculate that the price increase of Chinese goods is a preemptive response to adjustments in export tariffs. For whatever reason, the effect of holding prices up has already shown itself. 　　Domestic fertilizer market trends: Urea: Weak and volatile prices. The urea market in North China is characterized by weak and unstable prices, with limited new orders coming in. The actual ex-plant price of urea in Shandong is around 1,420–1,450 yuan per ton, while the purchase price for traders in Linyi has dropped to about 1,470 yuan per ton ； The prevailing ex-factory price of urea in Hebei is 1,440 yuan per ton, with transaction prices ranging from 1,420 to 1,440 yuan per ton ； In the Henan urea market, advance payments are predominantly used for transactions. Currently, the transaction price for urea within the province ranges from 1,400 to 1,430 yuan per ton ； The price at the trading stations for urea in Shanxi in large, medium, and small particle sizes is around 1,400 yuan per ton. 　　Monoammonium phosphate: Steady upward trend Driven by strong support from raw material prices, the pricing of monoammonium phosphate manufacturers continues to rise steadily. A 55% ammonium phosphate production enterprise in Hubei has stopped providing quotes and accepting payments; the prevailing transaction price is 1,800 yuan per ton for this grade, 1,820–1,850 yuan per ton for 58% ammonium phosphate, and above 1,850 yuan per ton for 60% ammonium phosphate. There is limited room for taking on new orders ； In the southwest region, the price of 55% ammonium sulfate powder is 1,800–1,850 yuan per ton, while the price for 55% granules is 1,850 yuan per ton. Supply is tight; large orders are being processed ； The ex-warehouse price for 55% ammonium phosphate in Shandong region is 1,900–1,950 yuan per ton ； In the Henan region, the ex-plant price for 55% ammonium phosphate powder is 1,700 yuan per ton, while 55% granulated ammonium phosphate is sold at over 1,750 yuan per ton; companies are generally willing to accept orders. 　　Potassium chloride: Prices remain stable. Demand for potassium chloride is moderate, and suppliers generally maintain steady pricing. Currently, 62% of port traders are offering 1,970 yuan per ton for Russian white potassium, while the price for Russian red potassium is 1,850–1,870 yuan per ton. Regarding domestic potash fertilizers, the transportation capacity from the western regions to the eastern areas is insufficient, making it difficult to fulfill many of the prior orders in a timely manner. The prevailing price for 60% potassium chloride at the delivery stations is 1,820 yuan per ton, while the reference price for dealers across various regions for delivery is 1,850 yuan per ton. Small factories in Qinghai are facing severe inventory overstock; the price of 57% potassium chloride at major delivery points is 1,650 yuan per ton. Traders at the border trade ports control the release of goods; the price for a small quantity of 62% Russian-Belarusian potash is 1,850 yuan per ton, while the actual transaction price ranges from 1,780 to 1,800 yuan per ton. 　　Compound fertilizers: Slight increase. Large-scale compound fertilizer manufacturers are operating at high capacity, leading to somewhat tight supply situations, while small and medium-sized enterprises operate at reduced capacity with steady but modest sales volumes. Fertilizer manufacturers face significant pressure on production costs, and some have raised prices for winter stockpiling once again. The prevailing ex-factory price for 45%S (15-15-15) in Anhui region is around 1,950 yuan per ton ； The provisional ex-factory price for 45%S (15-15-15) produced by some manufacturers in Hubei region is around 1,950 yuan per ton ； The latest ex-factory price for 45% S (15-15-15) in Shandong region is 1,900–2,150 yuan per ton ； In some areas of Jiangsu, the ex-factory price for 45%CL (15-15-15) is 1,660–1,760 yuan per ton, while the ex-factory price for 45%S (15-15-15) is 1,950–2,050 yuan per ton. (Hu Xiaoshan)

The phosphate rock market in Hubei remains stable. Author/Source: Date: 2016-12-06. Clicks: 16. The phosphate rock market in Hubei is stable; mining companies continue to ship goods steadily. Recent inquiries from downstream clients are satisfactory, while winter stockpiling of phosphate fertilizers is not very active. Phosphate rock manufacturers are placing orders with their existing customers. In terms of price: the price at the mine entrance for phosphate rock with a purity of 20% is 100–110 yuan per ton; the price for phosphate rock with a purity of 28%, delivered on board ships, is around 340–350 yuan per ton. The price for phosphate rock with a purity of 29%, delivered on board ships, is 370 yuan per ton, while the price for phosphate rock with a purity of 30%, delivered on board ships, is 400 yuan per ton. The phosphate rock market in Hubei is expected to remain stable in the short term. 　　Hubei Zhongping Phosphate Mine produces over 1,000 tons per day, mainly supplying phosphate ore in the 24%-27% purity range, and its shipments are primarily directed to existing customers within the province. The price at the mine entrance for 27% quality phosphate ore is 270 yuan per ton; the price can be negotiated upon settlement. It is reported that the actual transaction price is 250-260 yuan per ton. (China Business Network)

Compound Fertilizers: The Winter Stockpiling Game Awaits Market Conditions before Action is Taken. Author/Source: Date: 2016-12-06. Clicks: 12. Since November, raw material prices have risen repeatedly, pushing up the prices of compound fertilizers; however, market sales have been weak, and winter stockpiling progress has been slow. It is expected that the competition among manufacturers will continue until winter storage prices are clear. 　　Despite the weakness in urea prices, the overall upward trend in monoammonium phosphate, as well as potassium chloride and ammonium chloride, has provided strong support for compound fertilizer prices. 　　After more than a month of steady upward movement, urea prices in some regions have recently seen a slight decline. However, the supporting factors remain intact at present. For example, coal prices support costs, utilization rates remain low, and there is tight capacity in some markets. Currently, the prevailing price for small-grain urea in Shandong is between 1,450 and 1,480 yuan per ton (the same unit applies below). This price has dropped slightly compared to its peak in November, but it is still 250 yuan higher than the low point reached in August. 　　Except for a slight decline in urea, the prices of the other raw materials continued to rise. Among them, ammonium chloride saw the biggest price increase; the ex-plant price of wet ammonium was around 450 yuan, up by nearly 40 yuan compared to the previous month ； The ex-factory price of dry ammonium is around 550 yuan, up by nearly 100 yuan compared to last month. For these two reasons, it can be inferred that there is some support behind this round of price increases for ammonium chloride. First, rising coal prices have increased the costs for caustic soda manufacturers, giving them a strong inclination to maintain high prices. Second, companies can sustain 1–2 months’ worth of advance orders by charging high prices to control the number of orders received. 　　The price of monoammonium continues to rise. In addition to raw material support, low market supply is also an important factor. Reports suggest that environmental inspections in Hubei have led to a reduction in the operating rate of enterprises, resulting in a decrease in market supply. Most enterprises have scheduled their orders until the end of December or after New Year’s Day, and they have stopped accepting orders and providing quotes. The production restrictions in Hubei have also pushed up prices in other major production areas. Currently, the price of 55% ammonium phosphate in Hubei is 1,700 yuan, while in Sichuan it ranges from 1,700 to 1,800 yuan; the price upon arrival in the Shandong market exceeds 1,800 yuan. 　　This month, potassium chloride also showed a reversal, with prices bottoming out and rebounding, and trading conditions improving. Taking 62% Russian and Belarusian potash at the port as an example, as of now, the prevailing price offered by traders is 1,970 yuan, up by 170 yuan compared to the previous period, mainly due to a reduction in supply. It is reported that due to limited transport capacity, the capacity for transporting potassium fertilizer from Qinghai to other areas has declined ； At the same time, there has also been a reluctance to supply imported potassium fertilizers. 　　Against the backdrop of an overall upward trend in raw material prices, the discounts offered for winter stockpiling of compound fertilizers are limited, with companies clearly holding their prices steady. Some analysts believe that a peak season for winter storage will occur around the end of December, and as long as raw material prices remain stable or rise, there is a high likelihood that compound fertilizers will continue to see price increases. This is also why some companies do not provide a clear quote at the moment. 　　Current international prices for compound fertilizers are stable. As of November 24, CIF price: 340–350 US dollars per metric ton for bulk 48% compound fertilizer in Southeast Asia ； China’s 48% compound fertilizer: $300–305 ； Indian bulk 62% compound fertilizer (N-P-K 10%-26%-26%) – $285–300 ； The FOB price for Baltic bulk 48% compound fertilizer is $230–$295. (Agricultural Inputs Herald)

Four key factors suggest that phosphate fertilizers will see price increases! Author/Source: Agricultural Inputs News Agency. Date: 2016-12-07. Clicks: 14. Phosphate fertilizers benefit from factors such as low prices, rising costs, significant environmental pressures, and favorable export conditions; therefore, an increase in prices is highly likely. 　　**Data from the Bureau of Statistics and customs show that from January to October, national phosphate fertilizer production decreased by 1.4% compared to the same period last year ； In October, the national production of phosphate fertilizers was 1.72 million tons, an increase of 12% compared to the same period last year. Exports of the two main types of phosphate fertilizers, monoammonium phosphate and diammonium phosphate, declined by 28.5% and 37.3% respectively on a year-on-year basis. The sharp decline in exports and the slight reduction in production are largely reflected in the trend of phosphate fertilizer prices this year. 　　It is worth noting that despite extremely low prices for phosphate fertilizers, production of such fertilizers increased in October instead of declining. Moreover, the international market will see an additional capacity of nearly 2 million tons next year, which seems to indicate a rather bleak outlook for phosphate fertilizers. However, it’s important to take a long-term perspective; based on the following four points, the author believes that phosphate fertilizers should perform well in the future. 　　Price lows Recently, the prices of most bulk commodities have seen significant rebounds; the prices of sulfur and synthetic ammonia have risen by nearly 20% from their low points. Meanwhile, the prices of phosphate fertilizers remain at their lowest levels since the financial crisis in 2008, making them true price lows. This undoubtedly reduces the speculative risks associated with phosphate fertilizers, attracts investment interest, and thus helps to drive up their prices. 　　Pressure to protect the environment 　　The production of phosphate fertilizers generates large amounts of waste residues (phosphogypsum and acid), wastewater (containing heavy metals, acids, and arsenic), and waste gases (sulfur dioxide and hydrogen fluoride). Last week, the CCTV program \"Economic Half Hour\" exposed the environmental pollution caused by a listed company in Hubei and two phosphate fertilizer manufacturers affiliated with a central state-owned enterprise in Chongqing. The fact that even these two large state-owned enterprises in China have been singled out shows just how difficult it is to ensure environmental protection in phosphorus fertilizer production in the country, how many shortcomings exist, and how few enterprises are able to meet the emission standards. It is rare for CCTV, as an authoritative media outlet, to target phosphate fertilizer issues for two consecutive days; this will surely prompt various regions to strengthen environmental inspections of phosphate fertilizer manufacturers. 　　Governance: costs are rising sharply, and it is difficult to resolve this issue in the short term ； If left unaddressed, one can only play hide-and-seek with the law enforcement agencies, running the risk of being shut down at any time. As a result, phosphate fertilizer companies will face the greatest environmental pressure ever; whether they can survive may no longer depend on their profitability, but rather on their ability to meet environmental requirements. 　　On November 26, the third central environmental inspection team entered Hubei Province to conduct a one-month environmental inspection, which is bound to lead to a large number of phosphate fertilizer manufacturers in the region shutting down their operations as a way to avoid trouble. Hubei Province ranks first in China in terms of phosphate fertilizer production, far ahead of Yunnan, Guizhou, and Sichuan. The large-scale shutdowns of enterprises in Hubei will directly lead to a reduction in supply, driving up the prices of phosphate fertilizers. 　　The depreciation of the RMB against the USD is beneficial for exports. Recently, the RMB has depreciated by nearly 3% against the USD; on the one hand, this leads to an increase in the price of imported sulfur, providing a cost advantage for phosphate fertilizers. On the other hand, the United States is an important producer and exporter of phosphate fertilizers, and the depreciation of the RMB against the USD helps improve China’s competitiveness in terms of phosphate fertilizers, enabling it to capture market share from U.S. phosphate fertilizer companies. (The reason for focusing only on U.S. phosphate fertilizers is that other currencies may also have depreciated against the USD; therefore, compared to those other currencies, China’s price competitiveness does not increase as a result of the RMB’s depreciation against the USD.) 　　Tariff policies are favorable to exports. From a global perspective, due to differences in resource endowments and price formation mechanisms, China’s nitrogen fertilizers have long had high costs on a global scale; potassium fertilizers rely on imports, while phosphorus fertilizers are competitive on the global market. This year, a tariff of 100 yuan per ton has been imposed on China’s phosphate fertilizer exports, thereby indirectly reducing the competitiveness of these fertilizers in the international market. With all the preferential policies for fertilizers being removed, there are strong calls for zero tariffs on fertilizer exports, and such calls are indeed necessary. If there are zero tariffs on phosphate fertilizer exports next year, and considering the depreciation of the RMB, China’s phosphate fertilizer exports could drop by around 160 yuan per ton compared to current prices. Given that domestic companies have a greater capacity to bear losses than foreign companies, this might force foreign phosphate fertilizer producers to reduce or halt production. Therefore, if a zero-tariff export policy is implemented next year, China’s phosphate fertilizer exports are very likely to reach new heights. (Yu Lei)

Monthly Review of Phosphorus Ore: Little fluctuation in the domestic phosphorus ore market in November. Author/Source: Date: 2016-12-07. Clicks: 12. There was little variation in the domestic phosphorus ore market in November; purchases of phosphate fertilizers by end-users were moderate. Mining companies focused on fulfilling orders from existing customers, with few new orders being placed. The shipment volume by mining companies was average, and the phosphorus ore market remained stable. 　　Situation in the main production areas in November: The price of phosphorus ore with a purity of 28% at the freight yard of Machangping Railway Station in Fuquan and Weng’an areas is 285 yuan per ton (including taxes), while the price of phosphorus ore with a purity of 30% at the same location is 315 yuan per ton (including taxes). The ex-plant price of phosphorus ore with a grade of 30% in the Guiyang area is 300 yuan per ton. In Hubei region, the pit price for phosphorus ore with a purity of 20% is 100–110 yuan per ton; the price for phosphorus ore with a purity of 28% delivered on board ships is around 340–350 yuan per ton. Phosphorus ore with a purity of 29% delivered on board ships costs 370 yuan per ton, while phosphorus ore with a purity of 30% has a price of 400 yuan per ton. The ex-mine price of phosphorus ore with a grade of 27% in the Leibo area is 190 yuan per ton, including taxes, while that of phosphorus ore with a grade of 28% is 220 yuan per ton ； The delivery price at the county town for phosphorus ore with a purity of 26% is 190 yuan per ton (including taxes); for ore with a purity of 27%, the price is 210 yuan per ton. The delivery price at the county town for ore with a purity of 28% is 230 yuan per ton. Some mining companies charge 355 yuan per ton for ore with a purity of 28% when shipping it to Hubei. In Yunnan region, the ex-warehouse price of phosphorus ore with a purity of 22%-23% is 230 yuan per ton including taxes; the price at the mine site for phosphorus ore with a purity of 28% is 280-300 yuan per ton. The price at the mine site for phosphorus ore with a purity of 29% is 340-350 yuan per ton, while the price at the mine site for phosphorus ore with a purity of 30% (excluding taxes) is 420 yuan per ton. 　　This month, in the domestic phosphate rock market, most mines have been operating steadily, with sufficient inventory available, ensuring an ample supply. The winter storage market for phosphate fertilizers is gradually coming online; the market trend is positive in the long term, but it will have a limited impact on the phosphate rock market in the short term. This month, the supply and demand in the phosphate rock market have remained stable, and it is expected that the market trend for phosphate rock will remain steady in the short term. (China Business Network)

Sulfur-based compound fertilizers: tight supply drives up prices Author/Source: JLNCC Fertilizers Date: 2016-12-07 Clicks: 6 Since the second half of last year, due to various factors such as the narrowing gap between the prices of potassium sulfate and potassium chloride, the price difference between sulfur-based compound fertilizers and chlorine-based compound fertilizers has started to decrease. Taking a 45%3*15 product from a company in Hubei as an example, the price difference between sulfur-based and chlorine-based versions has dropped from 350 yuan per ton earlier on to around 200 yuan per ton at present. However, recently, due to factors such as plant shutdowns in certain areas and rising prices of raw materials, there may be a shortage of sulfur-based compound fertilizers, leading to higher prices; moreover, the price gap between these fertilizers and chlorine-based compound fertilizers shows signs of widening. 　　First, due to environmental inspections in Hubei, the facilities have been operating at less than full capacity. It is reported that as of November 30, all 7 central environmental protection inspection teams had completed their deployment for inspections. Hubei, which is a key production area for sulfur-based compound fertilizers in the country, was one of the sites inspected for environmental reasons. With the arrival of the inspection team, more local manufacturing facilities reduced their production or shut down, a phenomenon that was particularly evident in areas along the river such as Jingmen and Yichang. Based on the specified arrival period, from November 26 to December 26 ； It is expected that during this period, local compound fertilizer manufacturers will operate at reduced capacity, resulting in a noticeable tightening in some supply levels. 　　Secondly, the price of potassium sulfate has been rising fluctuantly, with increased cost support. As is well known, the price of potassium sulfate has risen significantly recently. The current mainstream ex-factory price for 50% powdered potassium sulfate is between 2250 and 2350 yuan per ton, an increase of around 200 yuan per ton compared to October. It has also been reported that shipments by Luoyang Potash are not smooth, and companies in inland areas are facing supply constraints due to having taken on orders at low prices earlier; there are even signs of further price increases in some areas. As the price of potassium sulfate rises, it will increase the cost of sulfur-based compound fertilizers, prompting compound fertilizer manufacturers to raise their prices as well. 　　Third, a larger amount of sulfur-based fertilizers is used in spring plowing. Spring plowing and sowing in our country begin in late February and continue until May, progressing from the south to the north ； In terms of crops planted during spring plowing, they mainly include rice, spring corn, rapeseed, soybeans, peas, fruit trees, vegetables, etc ； Based on the fertilization practices in downstream industries*, a relatively large amount of sulfur-based compound fertilizers is used, which in turn exerts a certain driving force on the market. 　　Fourth, the increase in sulfur-based fertilizers among compound fertilizer manufacturers was slightly higher. Judging from the recent price adjustments made by major compound fertilizer manufacturers, most prices have seen general increases; however, the price hikes for some sulfur-based fertilizers are slightly greater than those for chlorine-based fertilizers. Taking a company in Jiangsu as an example, currently the price of 45%Cl3*15 at the time of shipment is 1,650 yuan per ton, while that of 45%S3*15 is 1,880 yuan per ton. These prices have increased by 50 yuan per ton and 80 yuan per ton respectively compared to the beginning of the winter storage period, with a difference in the increase amount of 30 yuan per ton. Currently, some companies are overpricing sulfur-based fertilizers; although the actual market situation is not yet ideal, as the supply of fertilizers at low prices diminishes, the price gap between sulfur-based and chlorine-based fertilizers is likely to widen further. 　　Overall, after more than a year of adjustments, thanks to improved conditions in areas such as supply and raw materials, sulfur-based compound fertilizers are likely to face shortages and rising prices; the price gap with chlorine-based fertilizers may also widen and return to normal levels. (Xu Shuxian)

Price increase of AN sulfate Author/Source: Agricultural Inputs News Date: 12-07-2016 Clicks: 17 Since November, the market for AN sulfate has shown a steady upward trend, with prices continuing to rise. Currently, the ex-factory price of sulfuric acid An is mostly between 430 and 650 yuan per ton (the same unit applies hereafter). Compared to the previous low points, the increase has been around 60 yuan or more, with some prices rising by over 80 to 100 yuan. 　　The price of anhydrous sulfuric acid is rising steadily, due to three main reasons: First, there was a significant decline in prices earlier on. In September and October, the price of AN sulfate experienced a significant drop; the ex-factory price of AN sulfate in regions such as Hebei and Shanxi fell below 400 yuan, reaching a new low for this year. Looking at this period of sharp declines, there appears to have been excessive selling, with many irrational factors at play; the extremely low prices have also laid the foundation for a subsequent rebound. 　　Secondly, it is affected by the sharp rise in urea prices. AN sulfate and urea both belong to the category of nitrogen fertilizers; urea is the most prominent type among nitrogen fertilizers, and trends in the urea market have a certain impact on the price of AN sulfate. After October, driven by factors such as rising coal prices, low factory utilization rates, and an improved market sentiment, urea prices soared; in many markets the increase was of over 400 yuan, marking the highest rise during a off-season period. The sulfuric acid AN market was also encouraged by these trends and saw its prices rise as well. 　　Third, exports have emerged from their low point. In the first few months of this year, exports of sulfuric acid an were poor; in most months, export volumes declined on a year-on-year basis, with drops of over 40% in some months. However, this situation changed after September, as export volumes showed positive growth for two consecutive months in September and October. In October, export volumes reached 555,000 tons, setting a new high for monthly exports this year and reversing the downward trend seen earlier. The large volume of AN sulfate exports has reduced domestic supply, easing the supply-demand imbalance in the market and supporting higher prices for AN sulfate. (Zhou Heping)