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In the current drop in the price of ammonium phosphate, the sharp diving stage has ended, and the following has entered a stable and somewhat sluggish finishing stage. It is known that the drop in ammonium phosphate is due to a sudden drop in sulfur. The author saw a domestic statistical data on the price of sulphur. From the year of 2002 to the first half of 2007, the bottom price of sulphur was maintained at around 1100 yuan/ton. Sulfur abroad is very cheap, but the added Shanghai freight, two port costs, transit charges, etc., are shipped to China and the normal price will be above RMB 1,000/t. So, I think: Sulfur falls below 1,000 yuan/ton, it has already entered a relative bottom, and the production company can completely control and absorb the cost changes in this range.
Potash fertilizer is a monopoly resource for large enterprises from the international to the domestic. Of the three elements, the price of potash is the highest, and if it continues to rise, the sales volume will fall. In the event of a decline in sales volume, it is difficult to maintain high prices. At the same time, the monopoly pattern has caused potash prices to skyrocket and it is difficult to plunge. Therefore, the price of potash will show a downward trend in the sluggish sales. This trend is relatively slow and should be absorbed by manufacturers and distributors during the operation. For product selection, compound fertilizer's low-potassium products are beneficial for companies to avoid the downside risk of potash fertilizer.
From the perspective of supply, fertilizer prices have fallen from high levels to a lower level; from the perspective of demand conditions, higher food prices will drive demand growth. This year, the State introduced the price of grain purchase in 2009 in order to stabilize the market and stimulate domestic demand, and increased the purchase price by 13-15%. As food prices increase, the growth in demand for farmer households will be reflected first in fertilizer sales. The expected increase in grain prices will certainly increase the enthusiasm for growing grain and increase the related fertilizer input. Food prices directly affect the purchasing power of farmers, and the fertilizer market will be one of the most direct beneficiaries of rising food prices. This year's decline in the consumption of phosphorus compound fertilizers is directly related to the lack of purchasing power caused by lower food prices. Why can the price of ammonium phosphate in the international market rise to 1,200 U.S. dollars per ton? Obviously, the high food prices in the international market have played a supporting role. With the combined effect of the fall in fertilizer prices and demand growth, it is expected that the consumption of phosphorus and compound fertilizers will increase significantly in 2009 compared with 2008, and the overall sales volume can be restored to the level of 2007 and is expected to hit a record high.
The future is bright and the road is tortuous. The overcapacity in the fertilizer industry is already very serious. Coupled with the difficulty of capital circulation caused by high-value inventory, the competition will intensify next year. Judging from the current situation, the market competition in 2009 will be quite fierce. Some companies often appear to sacrifice profits in order to obtain liquidity.
Three Chemical Fertilizer Variety Market Development Prospects
Nitrogen fertilizers are currently basically within the cost line. 70% of urea produces energy from coal, so the urea price change factor is closely related to the price of raw coal in Australia. Although there have been recent reports of falling coal prices, coal prices will slowly decline as a result of winter heating in the north. Maybe coal prices will fall sharply in the next three to four months next year. However, urea prices may rise sharply at that time due to factors such as the close proximity of fertiliser sales season and tight transportation.