Compound fertilizer market test intensified

In late September, the weakening of compound fertilizer demand continued to deteriorate. After the manufacturers increased their prices, the quantity of orders received was significantly reduced, and the operating rate of the equipment plummeted. There is no strong support for the raw material market, and the test of compound fertilizers has been intensified.

At present, the mainstream factory price of 45% chlorine-based high-phosphorus compound fertilizer in Shandong is 2,100-2,200 yuan, and the mainstream factory price of 45%* compound fertilizer is 2,200-2,330 yuan; the mainstream factory price of 45%* compound fertilizer in Hubei is 2,250-2,300 yuan, 45 The mainstream factory price of % chlorine-based high-nitrogen compound fertilizer is from 1930 to 2050 yuan; the mainstream factory price of 45%* compound fertilizer in Anhui is 2250 to 2300 yuan, and the mainstream factory price of 45% chlorine-based compound fertilizer is 1850 to 1900 yuan. At the end of August, the price of raw materials rose in an all-round way, supporting the overall increase in the cost of compound fertilizers, and manufacturers’ prices continued to rise, with the largest increase exceeding 200 yuan. However, since the beginning of September, as the fertilizer shortage gap has gradually narrowed in the autumn, market demand has shown signs of weakness, high-priced transactions have not been smooth, and the number of factory orders has rapidly declined. The decrease in shipments put pressure on the company's inventory. For this reason, most companies cut their operating rates. According to statistics, as of now the overall operating rate has been as low as 40%.

The recent rains have also delayed the progress of the market. According to statistics from the Agriculture Department, in the past two weeks, precipitation was high in southern North China, central Huanghuai, southern South China, most of the Sichuan Basin, western Guizhou, and southeastern Yunnan. The reporter learned from the market that, due to the continuous rains, the speed of taking goods all over the country was slow, and it also delayed the replenishment progress of dealers to some extent. At present, fertilizers for the grassroots have not been started yet, and the volume of shipments at all levels is around 80%. Dealers are handling inventory. Before the terminal purchases fertilizer, there will be no obvious improvement in the goods in circulation. The replenishment volume is limited and there are still changes in demand in the later period.

The biggest variable that affects replenishment demand is price. From the current point of view, the dealers' acceptance of the price increases after the increase is not high, the manufacturers also said that the transaction is limited after the price increase, production is also mainly supported by the early orders. Whether the late-stage compound fertilizer prices can remain stable and lead to terminal sales depends on the price of raw materials.

The price of raw materials slightly fluctuates recently, but it has little effect on the cost of compound fertilizers, and prices can be stabilized. On the whole, the raw material market is bullish. In terms of urea, domestic demand is still weak, and industrial demand is unlikely to improve before October. The results announced last week by India’s third urea procurement tender show that the lowest bid price is equivalent to the Chinese FOB price of RMB 1590 to RMB 1,630, which is basically the same as the domestic sales price in China. Convergence, before the end of the export window period at the end of the 10th, will form a certain support for the domestic market. In terms of phosphate fertilizers, the mono-ammonium market has been operating stably. The orders received by enterprises in the short term will support the operating rate. However, as the fertilizer production in the autumn draws to a close, the transaction will slow down significantly. In the process of start-up reduction, prices do not rule out a slight decline. In terms of potash fertilizer, industrial demand has weakened, but the supply in the second half of the year has been relatively low, and the start of the Northeast market will drive grain potassium fertilizers to continue to rise steadily.

At present, the market is dominated by low-cost sources, and the fundamentals of oversupply remain unchanged. Compound fertilizers lack the motivation to continue rising. At the end of this month, if the replenishment starts smoothly, the market for compound fertilizers is expected to continue to be stable under the conditions of the overall stability of the raw materials market, laying the foundation for the start of the winter storage market.

International compound fertilizer prices stabilized last week. Baltic Sea bulk 48% compound fertilizer spot FOB price 365-375 US dollars, 45% compound fertilizer 355-365 US dollars; China 48% compound fertilizer CIF 375-395 US dollars in bulk; Southeast Asia bulk 48% compound fertilizer 385-405 US dollars; France Bulk 51% compound fertilizer spot arrival price 345-365 euros; UK bagged 40% compound fertilizer (NPK content 20%-10%-10%) 305-315 pounds; German bulk 45% compound fertilizer 320-330 euros .