The main trend of compound fertilizer prices rising again from a high level is becoming increasingly firm
2023/9/6
Although the urea market is constantly fluctuating, the price level has always been high. Recently, the market news has been slightly mixed, with mixed positive and negative factors. The urea market is in a high stalemate state. As the main raw material for autumn high nitrogen wheat fertilizer, the support of the urea market has led to multiple increases in the cost of high nitrogen fertilizer. Therefore, the factory price of high nitrogen fertilizer has experienced multiple rounds of increases. However, Nowadays, other content types such as balanced compound fertilizers have also seen significant price increases. Apart from the favorable urea market, what support are there?
Firstly, costs are rapidly rising. The main reason for the frequent increase in compound fertilizer prices is that the cost of raw materials has changed too quickly. After the recovery of nitrogen fertilizer market, the market for phosphate and potassium fertilizers has continued to rise. In autumn, the demand for monoammonium is already high, and downstream demand release is relatively concentrated. There are sufficient orders waiting to be placed by factories, and there is a strong willingness to increase prices; The price increase of potassium chloride has expanded, and the release of downstream demand has also significantly increased. Given the uncertainty of subsequent potassium fertilizer import sources, traders' reluctance to sell has increased, leading to an increase in market prices. The price of raw materials not only increased too much, but also at a fast pace, forcing compound fertilizer companies to stop and adjust at any time.
Secondly, the peak demand season is approaching. In September, it was a crucial stage in the autumn fertilizer market, and the purchase and sales of end markets in various regions were about to start one after another. Generally speaking, dealer replenishment activities should have started one after another. However, the progress of the replenishment market this year was slightly delayed, and most dealers were still digesting existing inventory. Due to the rapid rise in compound fertilizer prices, downstream fear of high prices became strong. Although high priced sources of goods are difficult to accept, due to the increasing cost pressure, composite fertilizer companies have had to increase their factory quotations. In addition, there is still room for replenishment. Therefore, even if demand is temporarily sluggish, composite fertilizer prices have risen to high levels.
Finally, the supply of goods is tight. At present, most composite fertilizer companies are fully executing pre order orders. After the rise in composite fertilizer prices, the willingness to pick up goods downstream has significantly increased, mainly targeting low-priced sources in the early stage. As of now, there are still some companies waiting to be shipped and there is still some surplus, which is expected to be executed around mid to late September; In addition, not only has the price of raw materials increased too much, but also some raw material fertilizer varieties are very tight in supply. Traders have a strong reluctance to sell, and the procurement activities of composite fertilizer factories are hindered. The connection between production and sales is not smooth, resulting in delayed fulfillment of early orders. Therefore, supply in some regions is slightly tight.
In summary, the high price of compound fertilizers has risen again, but it has not yet fully landed. It is necessary to observe the demand situation in the future replenishment market.
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