The external price of sulfur is firm, and the downstream phosphate fertilizer market is operating well
2023/9/14
At present, the strong spot price of sulfur is primarily supported by the good operation of the main downstream phosphate fertilizer market. As a downstream compound fertilizer of monoammonium phosphate, wheat fertilizer has been delayed in stocking this year, but with the centralized shipment and distribution of goods in the market, the delivery progress has significantly accelerated. In addition, there are still certain vacancies in the market, and although there are variables in the relevant merchants' replenishment positions. However, the production enterprise of ammonium monohydrate can execute the plan until around mid to late September, and its weekly capacity utilization rate in the industry was 64.77% last week, a month on month increase of 2.86 percentage points and a year-on-year increase of 30.45 percentage points.
At present, enterprises in the diammonium phosphate market have sufficient demand, and a few advance orders have reached the beginning of October. Some export orders still need to be fulfilled, and the supply of goods is becoming tight. In order to ensure the supply, the equipment load of enterprises in Puguang is relatively high. In addition, it is reported that the export quota of diammonium phosphate in the fourth quarter has been clarified, and coupled with the uncertainty of the impact of the earthquake in Morocco, the export end of diammonium phosphate will continue to be supported. Last weekend, the production capacity utilization rate of the diammonium phosphate industry was 65.38%, a month on month increase of 2.55 percentage points and a year-on-year increase of 26.74 percentage points; This performance indicates that the utilization rate of diammonium production capacity will continue to operate at a high level. Based on the overall performance of the monoammonium and diammonium markets, the sulfonic acid market holders have an optimistic attitude towards the market and will actively seek opportunities to operate.
Secondly, another source of confidence in the sulfonic acid market is the strong presentation of the external market. Although the previous rebound in the external market originated from the positive performance of the Chinese market. However, with the passage of time, the market prices of international sulfur have been rising significantly for several weeks. The September contract prices in the Middle East, which have received much market attention, have been announced one after another. The official prices for Qatar, Kuwait, and the United Arab Emirates in September are FOB102 USD/ton, FOB103 USD/ton, and FOB102 USD/ton, with a month on month increase of 20-22 USD/ton. Based on last week's news that the bidding price of COVID-19 is above FOB114 US dollars per ton, the external market has always released a signal that US dollar resources cannot be replenished at a low price in China. As a result, the holding of goods resources has naturally increased the market, making it difficult to find low-cost sources of goods in Hong Kong.
Overall, the capacity utilization rate of the phosphate fertilizer industry continues to operate at a high level and there is no possibility of a significant decline in September. The price of sulfur in the external market is strong, and foreign investors will not easily make adjustments to sell, providing necessary support for domestic spot prices. In addition, it is not ruled out that there will be replenishment measures at the terminal before the 11th anniversary, and during this period of time, the sulfonic acid market still has chips to dance with the wolves. The high level operation of the Hong Kong Depository System has always been a pressure point that cannot be ignored in the market. We can wait and see its impact on the market in the fourth quarter and whether the above two points have changed.
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