Bangladesh bidding ends, potential demand for diammonium is considerable

The Indian market has been quiet recently. On May 19, the Indian government announced an increase in the import subsidy of diammonium from the original 10,231 rupees/ton to 24,231 rupees/ton (currently equivalent to a subsidy of 331 US dollars/ton per ton). In addition, the Indian government also stipulates that the price of diammonium MRP is 24,000 rupees/ton. According to calculations such as India’s subsidies, MRP and taxes, India’s acceptable import CIF balance point is US$560/ton, which is lower than any current possible import price. Overlapped with recent restrictions on transportation barriers, India’s import demand is slightly flat.

At present, India’s latest diammonium inventory is 2.45 million tons, which is much lower than the 4.4 million tons in the same period last year; in the kharif season from April to September, India only has 1.8 million tons of diammonium phosphate available, compared with 4.1 million tons in the same period last year. However, the domestic DAP plant is currently operating at a low level and the supply is insufficient, and the market outlook for import demand is considerable.

In the domestic market, the current domestic demand is weak, and the number of new orders from companies is low, only 57% of East China and North China still have demand. However, due to the active export market and high export profits, most companies are currently ready to export until the end of June or mid-July. The domestic autumn wheat fertilizer market is dominated by diammonium and high-phosphorus compound fertilizers. In the process of simultaneous progress in the domestic and foreign markets, it is foreseeable that the market outlook for diammonium is tight. In addition, the price of raw materials is currently operating at a high level, and the cost of production remains high. Based on the current raw material prices, the cost of 64% of diammonium in Hubei remains high.

In summary, although diammonium is in the off-season, international demand is strong, coupled with power curtailment in the southwest region, the supply is shrinking. International market demand is gradually released, and potential demand is considerable. China's FOB prices continue to rise and export profits are considerable. It is expected that the diammonium phosphate market will remain stable at a high level in the short term, and upward expectations are obvious. The market outlook still needs to pay close attention to the market conditions in India, Bangladesh and Pakistan.