Phosphate Fertilizer Monthly: Gradual Release of Favorable Demand Signals Market Warming

Phosphate Fertilizer Market Price Analysis and Forecast:

Monoammonium Phosphate (MAP) Market Price Analysis:

This month, the domestic MAP market operated steadily before the holiday, with a slight increase in prices post-holiday.

According to Feidoodoo data: As of February 28, 2024, the domestic 55% powder MAP index is 3076.25, down by 23.75 from the beginning of the month, a decrease of 0.77%; the 55% granular index is 3250.00, unchanged from the beginning of the month; the 58% powder index is 3400.00, up by 16.67, an increase of 0.49%.

Before the Spring Festival holiday, affected by the sluggish market, both factories and downstream units reduced their operational loads, leading to lackluster market transactions. Enterprises gradually reduced production, resulting in a reduction in supply and a weak market operation. Downstream purchasing remained cautious, with compound fertilizer factories halting operations and reducing raw material purchasing. As the holiday approached and logistics gradually ceased, enterprises held steady prices without clear quotations, and transactions were conducted on a case-by-case basis, leading to a market state of "no price, no market."

After the holiday, the market inquiry atmosphere improved, driven by export sentiment, creating a bullish environment among traders and influencing enterprises' production enthusiasm. Both enterprise operation rates and daily production increased, with quotations maintaining pre-holiday levels and exploring slight increases. Some enterprises continued to implement base prices, with downstream demand following suit and a cautious purchasing attitude. Compound fertilizer factories gradually resumed operations, releasing raw material demand, with transactions maintained through negotiations.

Diammonium Phosphate (DAP) Market Price Analysis:

This month, the domestic DAP market was marked by a watchful atmosphere before the holiday, with prices mostly stable and minor adjustments. Post-holiday, prices saw a slight increase with trading resuming.

According to Feidoodoo data: As of February 28, 2024, the domestic 64% granular DAP index is 3843.33, down by 8.33 from the end of last month, a decrease of 0.22%; the 60% brown index is 3450.00, unchanged from the beginning of the month; the 57% DAP index is 3527.50, up by 5.00, an increase of 0.14%.

Before the Spring Festival holiday, enterprises had sufficient pending shipments, domestic sales transactions were increasingly flat, downstream follow-up was almost stagnant, demand did not improve, and the overall sentiment was cautious. The DAP market operated flatly with weak market consolidation, leading to limited new orders for enterprises, primarily fulfilling pre-sales. As the holiday approached, terminal demand halted, many traders exited the market, and market transactions stalled.

Post-holiday, DAP enterprises began actively shipping pre-received orders, improving the market trading atmosphere and facilitating better shipments. Coupled with relatively tight market supply and strained spot supply, local enterprises slightly raised quotations under the influence of export rumors, creating a speculative atmosphere among traders who were watchful of export policies. The agricultural spring plowing market's cautious sentiment continued, with traders operating cautiously and the trading atmosphere awaiting improvement; industrial downstream factories' purchasing remained prudent, with minimal essential demand follow-up.

Phosphate Fertilizer Market Forecast:

On the raw material front, the phosphate rock market saw minimal demand and flat transactions, with prices operating steadily. Phosphate rock prices are expected to fluctuate slightly on the weak side next month; the synthetic ammonia market saw a price decline before the holiday and a rebound post-holiday. With high supply, enterprises were keen to ship goods and reduce inventory, cautious in adjusting prices with a high willingness to increase prices, expecting the synthetic ammonia market to adjust upwards next month mainly. Post-holiday, the sulfur market's watchful sentiment persisted, with prices mostly stable, awaiting further guidance. Sulfur prices next month are expected to be influenced by market sentiment, with stable operations.

In terms of supply and demand, supply-side factors saw an increase in manufacturers' production enthusiasm towards the month-end influenced by a bullish market atmosphere, leading to a continuous increase in supply. MAP supply remained relaxed, while the DAP market experienced tight spot supply. On the demand side, downstream compound fertilizer spring plowing preparations are set to fully unfold next month, with factory demand gradually releasing and agricultural demand following suit. Next month's demand is expected to improve.

In summary, with upstream cost-side price support and gradual release of market demand, the phosphate fertilizer market is expected to warm up next month, with prices stabilizing and making minor upward adjustments.

Domestic Phosphate Fertilizer Industry Operation Rates:

Domestic Monoammonium Phosphate Industry Operation Rates:

As of February 23, 2024, the domestic MAP industry's operation rate was approximately 46.86%, a decrease of 2.99% from the previous month and a 17.83% decrease year-on-year. The MAP industry's operation rate declined, continuing to be lower than the same period last year.

Domestic Diammonium Phosphate Industry Operation Rates:

As of February 23, 2024, the domestic DAP industry's operation rate was approximately 57.44%, an increase of 1.71% from the previous month and a 2.23% decrease year-on-year. The DAP industry's operation rate increased within the month, slightly lower than the same period last year.

Domestic Phosphate Fertilizer Production Trends:

Domestic Monoammonium Phosphate Production Trends:

According to Feidoodoo data, as of February 23, the domestic MAP monthly production was 523,200 tons, a decrease of 354,900 tons from the previous month, a 40.42% decrease month-on-month, and a 42.23% decrease year-on-year.

Domestic Diammonium Phosphate Production Trends:

According to Feidoodoo data, as of February 23, the domestic DAP monthly production was approximately 1,088,900 tons, a decrease of 101,100 tons from the previous month, an 8.50% decrease month-on-month, and a 0.82% increase year-on-year.

Domestic Phosphate Fertilizer Port Inventory Trends:

Domestic Monoammonium Phosphate Port Inventory Trends:

As of February 23, the domestic MAP main port inventory was 22,000 tons, an increase of 10,000 tons from the end of last month, an increase of 83.33%, and a 9.20 decrease from the same period last year, a decrease of 80.70%. The domestic MAP main port inventory increased within the month.

Domestic Diammonium Phosphate Port Inventory Trends:

As of February 23, the domestic DAP main port inventory was 80,200 tons, an increase of 38,000 tons from the end of last month, an increase of 90.05%, and a 104,200-ton decrease from the same period last year, a decrease of 56.51%. The domestic DAP main port inventory increased within the month.