Demand is negative and costs are under pressure. Is monoammonium okay?
June 12, 2024, 9:21 AM
China Agricultural Media
2592
Guide
Highlights at a glance
The urea market in China has experienced volatile "roller coaster" price movements, with recent stabilization after August’s decline. As a key indicator of fertilizer market trends, urea's fluctuations have significantly influenced overall market sentiment. Monoammonium phosphate prices have dropped sharply, falling below 3,300 yuan/ton in some regions, driven by weakened demand, light trading, and logistical disruptions. Downstream compound fertilizer producers face rising inventory pressure amid low operating rates (~40%) and cautious buyer attitudes, especially in the Northeast, where delayed winter storage and shortened preparation periods further dampen demand. In contrast, diammonium remains stable domestically with tight supply and strong export orders; international prices have risen to $630–633/ton FOB due to robust demand in South and Southeast Asia. Rising raw material costs—particularly sulfur, synthetic ammonia, and phosphate ore—support phosphate fertilizer prices despite
Recently, in China, the price of urea is like a "roller coaster". The ups and downs of the market have really made people in the industry sweat. After the continuous decline in urea prices in August, September ushered in a fulcrum, and the market has been running steadily recently. As the weather vane of the fertilizer market, the ups and downs of the urea market have played a vital role in the overall atmosphere of the fertilizer market. Recently, the price of monoammonium has dropped significantly. Southwest 55 powdered ammonium ex-works reported 3300-3400 yuan/ton, and central China was 3400-3500 yuan/ton. It is reported that the low-end 55% powdered ammonium ex-factory in some areas has fallen below 3300 yuan/ton. Enterprises appropriately lower or suspend their quotations.
Light trading, bad market
The price of monoammonium has been at a high level some time ago, largely because of the tight supply. However, this degree of tension has been eased recently. Only some companies are ready to launch until the end of September, and most companies have little remaining to launch. In addition, motor transport in some areas is still blocked, resulting in increased pressure on corporate inventories. In addition, the recent decline in monoammonium prices and weak demand are also important reasons.
At this stage, the demand for monoammonium is weak, the new orders in the domestic market are not booming, the pressure on enterprises is increasing, and the center of gravity of the market has declined significantly. At present, the overall operating rate of downstream compound fertilizers is around 40%, and the inventory of some factories has increased. In addition, the current situation in the compound fertilizer market is not good, the demand for monoammonium is limited, the downstream wait-and-see attitude is increasing, and the new order transactions are fewer. Although the compound fertilizer companies and traders in the Northeast region have inquiries, they are generally motivated to stock up. For the higher-priced monoammonium, traders and companies are even eager to dump the goods. Dong Xiaogang, the sales manager of Heilongjiang Fenghe Technology Co., Ltd., said that the fertilizer preparation period has been shortened this autumn, and market demand has not yet started on a large scale. The winter storage period in the northeast may also be delayed in the later period, and the preparation time of winter wheat compound fertilizer may be shortened. The market situation this year is subject to a variety of factors and large variables. At this stage, the decline in monoammonium prices has a greater impact on downstream mentality, especially traders and compound fertilizer producers. In the later stage, attention should also be paid to the impact of low social inventories and international price trends.
In terms of diammonium, the domestic diammonium market is temporarily operating steadily, the supply of diammonium in the market is still tight, and the company has no inventory and sales pressure. In the domestic market, the mainstream ex-factory price of 64% diammonium in Hubei is 3550-3600 yuan/ton. There are not many high-priced transactions, and the number of corporate orders is sufficient. Most of them are waiting to be sent to the end of September, and a few companies are waiting to be sent to October. At present, the market sources of goods are mainly supplied to North China and other places, and there are still pre-export orders in execution. In the international market, demand in South Asia and Southeast Asia is still strong, international supply is tight, and prices continue to rise. Now the FOB price of diammonium phosphate in China has reached US$630-633/ton, and the bullish sentiment is strong.
Costs are rising, companies are under pressure
At present, raw materials continue to continue the state of tight prices. Although the price of sulphuric acid in some regions has been slightly lowered, the overall price is still relatively high, and the cost has increased significantly, which has formed greater support for the price of phosphate fertilizer. The industry believes that it is difficult for the price of phosphate fertilizer to fall sharply in the short term. Specifically: the supply of sulfur in the sulfur market is tight, coupled with the good downstream demand, domestic sulfur has continued to rise. As of last Thursday, the mainstream pellet price at the Yangtze River port was around 1940 yuan/ton, up 20 yuan/ton on a week-on-week basis; the synthetic ammonia market bottomed out and rebounded. , The market is active, and shipments have improved significantly. Favorable factors continue to ferment, and companies have rebounded quickly. Phosphate ore market prices have been adjusted upwards. Due to environmental inspections, mining volumes have decreased, and corporate phosphate ore reserves have declined. In addition, the downstream phosphate fertilizer market is imminent in the autumn, the market supply continues to be tight, and the price rises steadily. The 28% grade phosphate ore ship board price in Hubei is 620 yuan/ton, which is up 50-70 yuan/ton on a week-on-week basis. The phosphate ore market supply is biased. The tight situation has not yet eased, and the market has a strong bullish atmosphere. Probably, there are still upward expectations for prices in the later period.
Entering September, the company's early export orders to be issued have gradually been completed. Under the pressure of weak demand and high costs, it has brought negative factors to the monoammonium market. Under this circumstance, some companies have begun to reduce their pressure by restricting the start of work, adjusting the operating rate, and formulating price policies. It is understood that the current operating conditions of monoammonium enterprises are not good, and the overall operating rate is about 57.54%. Some enterprises have started to overhaul their installations. Two companies in Henan have started overhauls in the past few days. It is expected to resume production at the end of September. Some of the large plants in Anhui have begun to rotate overhauls. Some enterprises in Hubei and Sichuan also have plans for overhauls. At present, the tight supply of raw material resources has also eased the pressure on enterprises to a certain extent. In addition, the high raw material prices have prevented the monoammonium from falling sharply before the start of demand in the Northeast.
On the whole, phosphate fertilizer raw materials cost support is strong. Although domestic demand is not following up at this stage, market quotations have declined, and actual transactions may continue to loosen, but there is no possibility of a sharp decline in the short term. Later, attention needs to be paid to the demand in Northeast and other places.
Light trading, bad market
The price of monoammonium has been at a high level some time ago, largely because of the tight supply. However, this degree of tension has been eased recently. Only some companies are ready to launch until the end of September, and most companies have little remaining to launch. In addition, motor transport in some areas is still blocked, resulting in increased pressure on corporate inventories. In addition, the recent decline in monoammonium prices and weak demand are also important reasons.
At this stage, the demand for monoammonium is weak, the new orders in the domestic market are not booming, the pressure on enterprises is increasing, and the center of gravity of the market has declined significantly. At present, the overall operating rate of downstream compound fertilizers is around 40%, and the inventory of some factories has increased. In addition, the current situation in the compound fertilizer market is not good, the demand for monoammonium is limited, the downstream wait-and-see attitude is increasing, and the new order transactions are fewer. Although the compound fertilizer companies and traders in the Northeast region have inquiries, they are generally motivated to stock up. For the higher-priced monoammonium, traders and companies are even eager to dump the goods. Dong Xiaogang, the sales manager of Heilongjiang Fenghe Technology Co., Ltd., said that the fertilizer preparation period has been shortened this autumn, and market demand has not yet started on a large scale. The winter storage period in the northeast may also be delayed in the later period, and the preparation time of winter wheat compound fertilizer may be shortened. The market situation this year is subject to a variety of factors and large variables. At this stage, the decline in monoammonium prices has a greater impact on downstream mentality, especially traders and compound fertilizer producers. In the later stage, attention should also be paid to the impact of low social inventories and international price trends.
In terms of diammonium, the domestic diammonium market is temporarily operating steadily, the supply of diammonium in the market is still tight, and the company has no inventory and sales pressure. In the domestic market, the mainstream ex-factory price of 64% diammonium in Hubei is 3550-3600 yuan/ton. There are not many high-priced transactions, and the number of corporate orders is sufficient. Most of them are waiting to be sent to the end of September, and a few companies are waiting to be sent to October. At present, the market sources of goods are mainly supplied to North China and other places, and there are still pre-export orders in execution. In the international market, demand in South Asia and Southeast Asia is still strong, international supply is tight, and prices continue to rise. Now the FOB price of diammonium phosphate in China has reached US$630-633/ton, and the bullish sentiment is strong.
Costs are rising, companies are under pressure
At present, raw materials continue to continue the state of tight prices. Although the price of sulphuric acid in some regions has been slightly lowered, the overall price is still relatively high, and the cost has increased significantly, which has formed greater support for the price of phosphate fertilizer. The industry believes that it is difficult for the price of phosphate fertilizer to fall sharply in the short term. Specifically: the supply of sulfur in the sulfur market is tight, coupled with the good downstream demand, domestic sulfur has continued to rise. As of last Thursday, the mainstream pellet price at the Yangtze River port was around 1940 yuan/ton, up 20 yuan/ton on a week-on-week basis; the synthetic ammonia market bottomed out and rebounded. , The market is active, and shipments have improved significantly. Favorable factors continue to ferment, and companies have rebounded quickly. Phosphate ore market prices have been adjusted upwards. Due to environmental inspections, mining volumes have decreased, and corporate phosphate ore reserves have declined. In addition, the downstream phosphate fertilizer market is imminent in the autumn, the market supply continues to be tight, and the price rises steadily. The 28% grade phosphate ore ship board price in Hubei is 620 yuan/ton, which is up 50-70 yuan/ton on a week-on-week basis. The phosphate ore market supply is biased. The tight situation has not yet eased, and the market has a strong bullish atmosphere. Probably, there are still upward expectations for prices in the later period.
Entering September, the company's early export orders to be issued have gradually been completed. Under the pressure of weak demand and high costs, it has brought negative factors to the monoammonium market. Under this circumstance, some companies have begun to reduce their pressure by restricting the start of work, adjusting the operating rate, and formulating price policies. It is understood that the current operating conditions of monoammonium enterprises are not good, and the overall operating rate is about 57.54%. Some enterprises have started to overhaul their installations. Two companies in Henan have started overhauls in the past few days. It is expected to resume production at the end of September. Some of the large plants in Anhui have begun to rotate overhauls. Some enterprises in Hubei and Sichuan also have plans for overhauls. At present, the tight supply of raw material resources has also eased the pressure on enterprises to a certain extent. In addition, the high raw material prices have prevented the monoammonium from falling sharply before the start of demand in the Northeast.
On the whole, phosphate fertilizer raw materials cost support is strong. Although domestic demand is not following up at this stage, market quotations have declined, and actual transactions may continue to loosen, but there is no possibility of a sharp decline in the short term. Later, attention needs to be paid to the demand in Northeast and other places.
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June 12, 2024, 9:21 AM
June 12, 2024, 9:21 AM