Compound fertilizer prices are rising in many areas

On the first day of April, the price of Multi-Fertilizer increased by 30-50 yuan/ton, especially in Jiangsu, Northeast and Henan.

The biggest support for this round is urea. As we all know, urea has entered the upstream channel since the end of February. Up to now, it has risen by more than 200 yuan/ton in many places. Small particles in Shandong and Henan have been on the front line of 2000 yuan/ton as early as possible, which is also the highest price of urea since November 2018. The adjustment lasted for a long time and increased a lot, which exceeded market expectations. Especially for compound fertilizer enterprises, urea purchasing mostly adopts on-demand purchasing mode. Generally, the purchasing frequency is 7-10 days, and the large-dose stockpiling is only a few, which leads to the enterprises with less pre-stockpiling, and the new cost will increase more. Taking conventional urea 40% cl28-6-6 as an example, the cost of nitrogen fertilizer is 140 yuan/ton higher than that at the beginning of March. Although ammonium phosphate and potassium fertilizers have been declining in recent years, their declines have a narrowing trend, which makes it difficult to hedge the cost caused by urea rise. Statistics show that the cost of raw materials for urea 40% cl28-6-6 has increased 125 yuan/ton as of April 1 compared with the beginning of March.

Prices of enterprises are rising along with the trend, which promotes the rise of market prices. At the end of the month and at the beginning of the month, the adjustment of enterprises is relatively obvious. Part of the adjustment is to give preferential policies in the earlier period, with the impact range of 20-50 yuan/ton. Part of the adjustment is to increase the price directly, with the range of 30-50 yuan/ton, and some high nitrogen fertilizers are about 60 yuan/ton. With the reduction of preferential policies or the increase of prices, it will help to reduce the supply of low-end goods in the market, and the focus of new orders will move upwards. However, at present, it should be noted that before the adjustment of enterprises, the amount of advance receipts is large (especially at the end of the month these days, some distributors pay money actively for fear of rising prices). That is to say, at present, there are many orders in advance, especially spring tillage fertilizer. The increase of spring tillage fertilizer lies more in purchasing goods and boosting the market atmosphere. As for summer fertilizer, from the perspective of pre-harvest, the estimated impact is 30-40%.

From the downstream demand point of view, boosted by higher soybean subsidies, maize planting area will continue to be reduced in some parts of Northeast China, while summer maize planting area in Mainland China will be relatively better than other agricultural products, and the planting area may be relatively stable. However, with the increase of agricultural prices, the level or reduction of fertilizer application may be reduced in some areas. This is also the biggest restriction on the compound fertilizer market.

At present, the compound fertilizer market is still in a good mood. Among them, 45% CL3 * 15 of Jiangsu is more than 2000 yuan/ton, 40% cl30-5-5 of Henan Gaota is more than 2030 yuan/ton, and some new orders in Northeast China are delivered to 45% s12-18-15 at about 2480 yuan/ton. Although most of the prices are tentative increases and new orders follow up is not much, but supported by costs, enterprises intend to bid strongly. It is expected that before the Qingming Dynasty, some enterprises will adjust, and the supply of low-end goods in the market will continue to decrease, especially for high-nitrogen products. The turnover focus is expected to shift upward.