Raw material prices are loosening, can compound fertilizer return rationally?

Since the beginning of March, the price of ammonium phosphate has risen sharply. The main reason is the low inventory. The pending orders of upstream ammonium phosphate manufacturers have almost been scheduled for 2 months later, and the emergence of subsequent export orders has not only increased the export volume. , Also indirectly aggravated the vulnerability of social stocks in the Northeast fertilizer market. Until mid-August, the price of ammonium phosphate, under the control of the policy, appeared a period of calm, and the price stabilized. Driven by the prices of coal and natural gas, the price of urea increased from RMB 2,400/ton ex-factory in June to RMB 3000-3060/ton in Shanxi on October 25th. According to friends in the industry, according to coal prices, the cost of urea has exceeded 3,100 yuan/ton, which is a proper "coal super wind". The latest international price of urea is US$719/ton. The Chinese state encourages urea companies to increase their positions and take actions in export, including legal inspections, to give priority to guaranteeing domestic supply.

Low operating rate, winter storage is facing difficulties

In summary, the trend of winter storage this winter and next spring has become the biggest confusion in the industry. The use of fertilizers in winter wheat areas such as Huanghuaihai has basically ended, and the stocks of raw materials and products of compound fertilizer manufacturers have dropped to a low level. For example, a compound fertilizer plant with an annual output of 50,000 tons has an estimated total inventory of 3 to 5 million tons. It is understood that the current inventory in Northeast China is less than 20%, which is a very low level compared with previous years. The price of urea fluctuates due to the supply of coal and natural gas. Coal mining and the release of production capacity of urea manufacturers are also restricted by environmental protection and carbon emissions. If considering that under the epidemic situation, it is necessary to protect people's livelihood and food security, Ge Jie suggested that the carbon emission policy of agricultural chemicals should be adjusted and relaxed to increase the effective coal supply. At the same time, strengthen the control measures of fertilizer exports, and give priority to ensuring the stable development of China's domestic industrial and agricultural production.

Fertilizer prices gradually return to rationality in the spring of tomorrow

The current international chemical fertilizer prices are still high, and their high planting costs affect farmers' enthusiasm for growing grain and endanger food security. Although the current fertilizer prices are still relatively high, they have stabilized under China's national series of "combined punches", and ammonium phosphate and urea are also showing signs of loosening. Ge Jie inferred that the fertilizer market in the next spring is likely to go down. Especially in March next year, when heating in northern China ends, coal and natural gas resources will no longer be in short supply, and more will be used in power plants and urea manufacturers, thereby increasing the supply of fertilizers and returning the prices of urea and synthetic ammonia to a rational level. If the big potash contract can be carried out smoothly, coupled with the adjustment and protection of environmental protection and carbon emission policies, then the price of fertilizer will return to a reasonable range just around the corner. The phosphate and compound fertilizer conference is about to be held in Nanchang. It is recommended that manufacturers stay on the sidelines to prevent and control risks, and wait for the policy to gradually become clear, to advance in small steps, and to advance the progress of winter storage in an orderly manner. (Source of the article's viewpoint: Ge Jie, Deputy General Manager of Anhui Bengbu Regal Agricultural Materials Co., Ltd.)

Reporter's Notes:

At the end of the autumn market and before the winter storage, compound fertilizer is still strong due to the impact of raw material prices. The rigid agricultural demand still exists, but affected by rain and weather, the autumn harvest of maize and wheat in the north has been postponed, and the demand for fertilizer is lower than in previous years. In terms of raw materials, the price of urea continued to rise due to the tight supply, the issuance of printed labels and the increase in raw material prices; the supply of monoammonium was tight, and the price rose slightly; the price of potassium chloride was loose. With the subsequent gradual increase in the supply of domestic compound fertilizer in China, the relationship between supply and demand will be correspondingly eased. Coupled with the deepening of the impact of policy control, the possibility of large fluctuations in the market outlook is unlikely.

Recently, among the readers of the agricultural material morning market, many old farmers are analyzing the current fertilizer trend and how to operate the market outlook every day. Most people still stick to it after helplessness, because facing the "cold winter" of the market, everyone is an insider. Although the market is difficult, we still need a strong heart. Winter has come, can spring be far behind?