Monocalcium Phosphate (MCP) Market Summary for Q4 2023

Overview of the MCP Market in Q4 2023:

In the fourth quarter of 2023, the monocalcium phosphate market showed a trend of high-level upward movement. Influenced by the off-season of the fertilizer market, the price variation range was relatively small.

According to Fei Duoduo's data: In Q4 2023, the lowest value of the domestic MCP 55% powder index differed from the highest value by 381.25, a range of 12.22%; the 55% granule index differed by 580.00, a range of 20.57%; the 58% powder index differed by 366.67, a range of 11.06%.

In October, MCP prices adjusted slightly upwards. After the National Day holiday, market demand was lukewarm, and the autumn fertilizer demand was wrapping up, leading to weak demand overall but with regional variations. The Northeast region saw decent inquiries and good shipments; industrial demand for compound fertilizers decreased, making significant upward price movements for MCP challenging. However, supported by pending orders and high raw material prices, enterprises held firm in their pricing.

In November, MCP prices faced downward pressure after a slight uptick. Enterprises were inclined to hold prices firm due to sufficient pending orders, and with no pressure on shipments, prices were adjusted upwards. However, cautious and limited follow-up orders were seen due to the off-season effect on downstream demand and high prices. The market continued its lackluster performance during the phosphate compound fertilizer conference, and manufacturers maintained firm prices.

In December, the MCP market remained stable with little change in prices. As pending orders were reduced, support for prices weakened, and enterprises adjusted their factory prices flexibly based on pending orders and prices. The demand continued to be tepid, and mid-month weather conditions impacted shipments, further slowing new order follow-ups and intensifying market caution.

China's Phosphate Fertilizer Production and Operating Rates Statistics:

China's MCP Production Analysis:
According to Fei Duoduo data: From January to December 2023, China's cumulative MCP production was 96.761 million tons, an increase of 5.614 million tons from the previous year, a growth of 6.16%.

China's MCP Industry Operating Rate Statistics:
From January to December 2023, the average operating rate of China's MCP industry was 54.43%, an increase of 1.52% from the previous year.

In October, more MCP plants shut down for maintenance, and some reduced production, leading to a noticeable reduction in MCP output. In November, plants that had stopped for maintenance gradually restarted, mainly towards the end of the month, resulting in a slight decrease in production. In December, more plants resumed production, but some stopped due to raw material shortages or environmental inspections, slightly decreasing the operating rate.

China's Phosphate Fertilizer Import and Export Data Analysis:

China's MCP Export Data:
Customs data shows that from January to November 2023, the cumulative export total was 1.9141 million tons, an increase of 0.0391 million tons from the previous year, a growth of 2.08%.

China's MCP Apparent Consumption Analysis:
According to Fei Duoduo data: From January to November 2023, China's apparent consumption of MCP was 87.452 million tons, an increase of 14.409 million tons from the previous year, a growth of 19.73%.

China's Phosphate Fertilizer Port Inventory Trend:

According to Fei Duoduo's data: As of December 29, 2023, the domestic MCP port inventory was 79,000 tons, a decrease of 53,800 tons from the previous year, a decline of 40.51%. Starting from October, the international market was average, domestic export orders were limited, and the MCP market mainly focused on domestic sales, gradually reducing export orders.

Analysis of Upstream (Ammonia Synthesis) in Q4 2023:

In the fourth quarter of 2023, the price of synthetic ammonia first rose and then fell.

In October, the synthetic ammonia market first rose then fell. Post-National Day, transportation limitations impacted shipments, leading to regional price increases aligned with local supply and demand. Downstream demand dropped during the off-season, but new plant production supported synthetic ammonia demand, providing firm support to the market.

In November, synthetic ammonia prices noticeably declined. Early in the month, some enterprises faced operational issues, reducing synthetic ammonia supply and tightening the market, leading to price increases. However, downstream reluctance to purchase at high prices led to resistance, and under shipment pressures, ammonia enterprises started showing signs of price reductions.

In December, synthetic ammonia prices showed mixed trends. Early in the month, anticipated maintenance shutdowns reduced supply, improving the trading atmosphere and slightly increasing prices. However, stable industrial and agricultural demands, and slight improvements in downstream operations, kept high-price transactions limited, showing a lackluster demand and pressuring prices downwards.

Q1 2024 MCP Market Forecast:

Cost aspect: Synthetic ammonia prices fluctuate, phosphorus ore supply remains tight, and raw material prices continue to provide high-level support.

Supply aspect: The industry maintains high operating rates with ample market supply.

Demand aspect: Downstream demand remains weak with a cautious outlook.

With sufficient market supply and stable demand, MCP market prices in the next quarter are expected to decrease gradually and slightly.