Diammonium Phosphate (DAP) Market Summary for Q4 2023

DAP Market Overview in Q4 2023:

In the fourth quarter of 2023, DAP prices initially rose and stabilized, with overall price changes mostly influenced by policy factors and maintaining stability.
According to Feidoodoo's data: In Q4 2023, the domestic DAP 64% index saw a maximum difference of 120.00 compared to the minimum, a change of 3.19%; the 60% index's maximum difference was 480.00, a change of 14.63%; the 57% granular index had a maximum difference of 347.50, changing by 10.65%.

In October, domestic DAP prices first rose and then stabilized. As the autumn fertilizer sales phase ended and winter storage market follow-up was insufficient, traders mostly adopted a wait-and-see approach, leading to a tepid overall market atmosphere. However, with high costs and export support still in place, the market’s winter storage demand gradually followed, favoring the overall market. Enterprises mostly maintained high prices due to cost factors and exports. In late October, internal sales orders mostly concluded, and some facilities entered maintenance or reduced production, focusing on fulfilling previous export orders, and making domestic sales scarce. International demand steadily followed, but with limited exports, enterprises had restricted supplies to offer.

In November, domestic DAP prices remained high and stable. Initially, holding traders had limited stock left and were reluctant to sell, expecting a positive future market. With increased maintenance and shutdowns, market supplies decreased, supporting high prices with limited availability. The phosphate compound fertilizer conference led to a wait-and-see attitude, with the market remaining subdued post-conference. Despite supply constraints, prices remained stable due to the policy of maintaining supply and price stability.

In December, domestic DAP prices slightly decreased while stabilizing. With over a month's worth of orders, enterprises had no inventory or sales pressure, but some traders lowered prices slightly, leading to a gap between enterprise sales and trader prices. Demand for winter storage was still insufficient, but there was potential for future follow-up.

Chinese Phosphate Fertilizer Market Production and Operation Rate Statistics:

DAP Production Analysis in China:

According to Feidoodoo data: From January to December 2023, China's cumulative DAP production was 1381.46 million tons, an increase of 243.99 million tons or 21.45% year-over-year.

Chinese DAP Industry Operating Rate Statistics:

In 2023, the average operating rate of the DAP industry in China was 57.12%, an increase of 7.38% from the previous year.

DAP Export and Consumption Data Analysis in China:

DAP Export Data:

According to customs data: From January to November 2023, the cumulative export total was 466.88 million tons, an increase of 134.20 million tons or 40.34% compared to the previous year.

DAP Apparent Consumption Analysis in China:

According to Feidoodoo data: From January to November 2023, China's apparent DAP consumption total was 813.59 million tons, an increase of 8.47 million tons or 1.05% compared to the previous year.

Chinese Phosphate Fertilizer Port Inventory Trends:

As of December 29, 2023, domestic DAP port inventory was 17.32 million tons, a decrease of 0.72 million tons or 3.99% from the previous year.

Agricultural Downstream (Compound Fertilizer) Analysis for Q4 2023:

In Q4 2023, compound fertilizer market prices rose slightly while stabilizing. In October, prices fell and then rose, with a small overall change. Influenced by upstream raw materials, the market was cautious, and prices fell initially but rose later due to rising potassium fertilizer costs. In November, prices continued to rise, supported by strong raw material prices. In December, compound fertilizer prices slightly decreased but remained stable, with manufacturers focusing on fulfilling orders and expecting future demand.

DAP Market Forecast for Q1 2024:

Cost Perspective: Ammonia prices fluctuate, and phosphate rock supply remains tight, supporting high raw material prices.

Supply Perspective: Market supplies are gradually increasing, but are still limited.

Demand Perspective: Market caution persists, with weak demand but potential for future release.

Overall: The market supply is rising from a low level, with a temporary supply advantage. However, current demand is moderate, with potential for future release. It is expected that the DAP market prices will continue to stabilize with slight adjustments in the next quarter.