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Weekly Report on the Compound Fertilizer Market for the Second Week of December Author/Source: China Fertilizer Network Date: 2016-12-12 Clicks: 7 This week, most compound fertilizer manufacturers have begun to announce their prices for winter storage; these announcements come mainly from companies in Shandong, Jiangsu, the two Hubei provinces, and Anhui. The prices for winter storage in the Northeast region remain unclear. Currently, the provisional ex-plant prices for winter storage of 45% Cl(15:15:15) compound fertilizer are around 1,700–1,850 yuan per ton (the same unit is used throughout). For 45% S(15:15:15) compound fertilizer, the provisional ex-plant prices for winter storage range from around 1,830 to 2,100 yuan per ton. The prices of sulfur-based fertilizers have risen significantly; some companies offer favorable incentives such as interest on payments and transportation subsidies. The provisional pricing for the winter storage of compound fertilizers continues to rise this week, for three main reasons: first, the prices of raw materials are rising sharply, with nitrogen, phosphorus, and potassium all seeing increases ； Secondly, environmental inspection teams have been sent to various locations; some enterprises have entered a shutdown phase, and the remaining inventory of finished products (especially those of sulfur-based compound fertilizers) is not large ； Third, transportation is strained and the supply of raw materials is hindered, leaving enterprises in a difficult situation, with tight supplies in certain areas. As a result, the prices offered by compound fertilizer manufacturers have risen by around 50-100 yuan this week. However, due to the off-season demand, downstream buyers remain hesitant and cautious; the pace of stockpiling fertilizer by these buyers is still slow. Manufacturers are placing orders in advance, and as of December 9th, the overall operating rate of these companies was around 57%. It is expected that stricter environmental regulations will lead to a decline in operating rates in the future, but there is still potential for an increase in compound fertilizer prices. In terms of raw material costs: the operating rate of urea manufacturers in Shandong is only around 52%, while industrial compound fertilizer plants are seeing good demand; the prevailing factory prices have risen to around 1,480 yuan ； The ammonium chloride market in the main production areas remains stable, with manufacturers having a large number of orders pending; it is therefore necessary to control new orders accepted. The price of dry ammonium delivered locally in Jiangsu region is 580-590 yuan ； The price of monoammonium phosphate remains bullish due to tight supply; currently, the mainstream ex-factory price for 55% powdered monoammonium phosphate in areas that are not major production zones has risen to 1800–1850 yuan. Many enterprises in Henan have not provided quotes yet; due to issues such as shipping delays and a large number of pending orders, sales have been suspended for about a week ； The price of potassium chloride is seeing another rise; it is likely that the price of 62% pure potassium at ports will reach 2,000 yuan in the near future. However, most parties involved in the supply chain believe that further increases will be highly risky, and that the room for price rises is limited ； With the recent further rise in the price of potassium chloride, as well as reduced production rates due to local environmental regulations and routine maintenance work, manufacturers in Mannheim have once again raised their prices. Currently, the price for 50% and 51% powdered potassium sulfate at the delivery site is 2200–2300 yuan; actual transaction prices generally do not exceed 2250 yuan, and sales are performing fairly well. In summary, raw material prices are rising sharply, putting increasing pressure on the costs of compound fertilizers. Some companies have raised their prices by around 50–100 yuan. It is expected that these rising raw material prices will not decline in the short term, and the lower-end prices of compound fertilizers will continue to rise as well. Due to recent environmental inspections, it is likely that the production volume of compound fertilizers will decrease in the future.