Since late October, domestic ammonium sulphate market continues to rise, ushered in a "warm winter" market. As of December 22, the domestic mainstream transaction price has exceeded 560 yuan (ton price, the same below), and even reached about 640 yuan in northeast China, with a continuous increase of more than 12%, basically restoring the adjustment since August and keeping a firm position above the annual average price.
"The main positive factor for the continuous rise of ammonium sulfate market in recent two months is that the export market is growing against the trend this year. Especially in the context of the ongoing international epidemic situation, the export of ammonium sulfate is rising rather than falling, which greatly encourages the operation enthusiasm of the domestic market. At the same time, the steady improvement of domestic demand, production costs are relatively high foundation for the continuation of the warm winter market. Shandong trader Zhang Yi analysis said.
Exports are growing against the trend
According to the statistics of Henan Chemical Industry Network, the total export volume of ammonium sulfate in China from January to October this year is 6,803,600 tons, with a year-on-year growth of 18.8%, which is a big increase in export in recent years. Among them, the agricultural country Brazil is the main country exporting ammonium sulfate in Our country, and the exported ammonium sulfate to Brazil in August was as high as 400,000 tons.
"Countries in Southeast Asia rely on agriculture but are not self-sufficient in fertilizers, so southeast Asia is a major market for our ammonium sulfate exports. The second half of the year is the foreign market with fertilizer season, so ammonium sulfate export volume increased substantially. Zhang Yi analyzed that the export of ammonium sulfate in China increased significantly from August to October. On the one hand, the reason was that the supply of ammonium sulfate in the international market was relatively tight; on the other hand, some areas in south Brazil further stimulated the export of ammonium sulfate in China due to the low price of ammonium sulfate and its substitution for urea. On the other hand, in the context of relatively weak domestic demand, and the export price is higher than the domestic market, manufacturers and traders hope to increase the export, so that the export of ammonium sulfate has repeatedly set new highs.
In addition, after the continuous improvement of the quality of domestic ammonium sulfate products, the demand for extruded pellet ammonium sulfate in the international market has been increasing year by year. For example, Brazil imported about 400,000 tons of ammonium sulfate from China in November, 97% of which were extruded pellet sources. In the future, granulated ammonium sulfate export still has a large room for growth.
Domestic demand is steadily improving
The reporter learned from the major fertilizer enterprises in Henan, Shanxi, Shandong and other places that since late October, the load of urea plant has continued to decline, from 67% in late October to 57% on December 20. The tight price of urea products has risen, forming a favorable support for the ammonium sulfate market. In the same period, the load of compound fertilizer plant increased from 37% to about 46%, increasing the procurement of ammonium sulfate, causing the acceleration of social supply of goods in circulation, and promoting the steady growth of domestic demand for ammonium sulfate.
According to Niu Libo, head of fertilizer sales at Henan Energy and Chemical Industry Group, as the market for urea and compound fertilizers continues to recover, the operation of fertilizer enterprises is relatively stable at present. In addition, the early operation rate is insufficient to replenish the inventory, and the overall operation rate of fertilizer plants in various regions is in the trend of increasing, so the demand for raw materials is also increasing, especially in northeast China, which is one of the reasons why the price of ammonium sulfate in this region is higher than that in other regions.
Cost support continuance
In recent years, more and more strict environmental protection and coking enterprises to leak, backward production capacity out and a series of policy implementation, to yield large coking grade ammonium sulfate and desulfurized ammonium sulfate, constantly improve the environmental costs to the desulfurization products, many enterprises of ammonium sulfate production basic operation is negative profit, this is also in recent years, one of the reasons for ammonium sulphate prices down is down.
Shao Huiwen, a senior market commentator, said the high production cost of ammonium sulphate will continue considering the current operation of the desulfurization industry and the future development trend. With the diversification of ammonium sulfate products, such as small particles and large particles, as well as the multi-channel marketing, such as export and production of compound fertilizer and compound fertilizer, etc., and the support of high cost will be conducted to the downstream, the possibility of the price decline of ammonium sulfate has become less.
Industry experts said that as the epidemic slows or is under control in some foreign countries, the international export market is still promising. At the same time, the recent price of urea continues to rise, there will be good support for ammonium sulfate market, it is expected that the short term ammonium sulfate market is expected to maintain the narrow finishing under the warm operation.
