Why is diammonium phosphate so in 2019?

In the blink of an eye, there is not much left in 2019. Looking back on this year’s market trend of diammonium, it can be said that the market trend of diammonium is high and low. Take Heilongjiang as an example, in the same period last year, 64% of the price of diammonium arriving in Heilongjiang was 3000 yuan (ton price, the same below), while the price of 64% of high-end diammonium arriving in advance is only 2500 yuan, a drop of about 500 yuan. In the winter storage market, diammonium enterprises and downstream distributors are caught in a tug of war, so why does the diammonium market become this year?

First of all, the fertilizer market environment is poor. Although the settlement price of diammonium is relatively high this spring, the sales volume in Northeast China is relatively poor, and there are many leftovers. The downstream dealers make less profits when selling diammonium, and some dealers even lose money. In addition, the urea price fluctuates frequently this year, the start-up of compound fertilizer enterprises is slow, the overall environment of fertilizer market is slow to warm up, the downstream dealers’ confidence in stock is naturally insufficient, and the market naturally presents a stalemate state.

Secondly, the support of low operating cost of raw material price is weakened. At present, the sulfur port stock is at a high level of more than 2.6 million tons, and the highest port stock in previous years is only about 1.7 million tons. The granular sulfur in the Yangtze River port has been as low as about 500 yuan, but there are still sulfur coming to the port in the near future. In addition, the purchase of ammonium phosphate enterprises is carried out on a quarterly basis, so the sulfur price is difficult to rise in the short term. The lack of cost support makes the firm price not enough. In order to relieve their own pressure, individual factories frequently offer low prices and the market quotation is chaotic.

Finally, exports are weak. The biggest difference between this year’s diammonium market and last year’s is the weak export. Last year, the price of diammonium was high in the world, India and Pakistan had better demand, 64% of diammonium was more than US $400 FOB, and some enterprises in Hubei even gave up the domestic autumn market with low price in order to seize the international market, which made the social inventory relatively low when the winter storage started last year, which provided a precondition for the start of high winter storage in the later period. However, the international market of diammonium is in a mess this year, and the international price is falling all the way. At present, the FOB price of 64% of diammonium in China has been as low as US $295-300. According to the customs data, China exported 5.3419 million tons of diammonium from January to October, which is nearly 90000 tons less than the 6.21 million tons of the same period last year. This price pattern makes most domestic enterprises lack of export enthusiasm, and only a few large factories slightly walk away. Most factories began to focus on the domestic market, the supply pressure increased, coupled with more social inventory this year, the price of winter storage is naturally not high, and downstream dealers are reluctant to purchase in order to avoid risks, so the market is now in a stalemate state.

To sum up, the price of diammonium in winter this year has dropped by about 500 yuan compared with the same period last year. The downstream market is dominated by cautious psychology, and most dealers dare not take the goods rashly. The overall environment of the fertilizer market is poor, the supply continues to be excessive, the raw material price is low and consolidated, the international market demand is weak, many negative factors dominate the market of diammonium in 2019, which is so bleak, and the downstream dealers mostly adopt the minimum guarantee policy to alleviate the operation pressure.