At the beginning of September, the domestic autumn fertilizer market entered the second half, and wholesale markets in various regions started one after another, and most factories were busy delivering goods. Good news came from the international market. First, urea won the bid of 800,000 tons in India. Then there was news that the FOB price of diammonium in some factories had reached US$340 (ton price, the same below). October. However, the domestic market's response to these good news is not satisfactory. The urea quotations in some areas such as Lianghe in Shandong have even declined. New orders for the diammonium plant are relatively small, and the downstream accepts low levels of high prices. It is currently a low season for urea sales, and the price decline is justified, but diammonium is in the peak sales season, and the volume of new orders has begun to decline. Is there a turning point in the autumn market?
First, the focus of the market has changed. Let me give everyone a reassurance. Although there are few new orders from the factory, this does not prove that the domestic demand for diammonium is weak. On the contrary, there is a certain degree of insufficient supply in the domestic diammonium market. Because of the low price in the early stage, most agents and traders have already placed orders in the early stage. Some factories are waiting for shipment until the end of September. There are not many sales sources in the factory, so there are fewer new orders. According to a survey conducted by China Fertilizer.com, the current arrival volume of diammonium in the North China market is about 4-5%, while some dealers operating in Hubei supply only about 30%. The focus of the market has shifted from factory sales to delivery.
Secondly, the grass-roots fertilizer preparation has not yet been fully activated. Although the wholesale market is in full swing, the water splash in the grassroots market is still not big. One is because some distributors worry that diammonium will increase prices during off-season and peak-season prices, and most of them operate back-to-back; second, because some grassroots distributors believe that the price of diammonium is currently at a high level and there is little room for price increases in the later period. The purchase cost was not much different in early October, so the reserve of diammonium was suspended until the end of September or early October. But farmers’ demand for fertilizers really exists, and as the market gradually stabilizes, demand at the grassroots level will be released soon.
Finally, international demand is good, and domestic sales sources are tight. Downstream dealers are worried about the off-season price increase and peak season price decline situation because the diammonium plant overdrafts the peak season demand during the off-season, and the goods produced during the peak season lack flow, which can only impact the market at low prices. But this year’s export market is good. The FOB price of diammonium in my country has risen to about US$341, which is converted to about 2230 yuan for the naked goods of Hubei enterprises. This price is higher than the cost of packaging and cash payment. The actual domestic transaction price of 2220-2250 yuan. Therefore, some companies have relatively high export enthusiasm. According to the author’s understanding, some factories have delayed the delivery of domestic orders in order to give priority to exports, and downstream dealers have not received enough goods. In order to relieve the pressure of domestic shipments, some factories have suspended export orders and the main supply Domestic pre-orders.
In summary, in the context of favorable exports, the main reason for the shortfall of urea is the lack of support from domestic demand, and the difficulty in increasing the price of diammonium is mostly because of the high expectations, rather than the market turning point, supported by the domestic and foreign markets. , Diammonium in the autumn market will continue its steady and positive performance.
Source: Chemical Network
