Ammonium Phosphate Quotes: When an ammonium price rises

China's fertilizer industry is accustomed to overcapacity. We also need to learn to find opportunities in surplus. This time, the price of monoammonium phosphate tells us that overcapacity does not mean that there is excess supply. After completing the destocking process, it is often brewing huge business. opportunity.

From January to May of this year, the price of mono-ammonium continued to decline, falling from the highest of 1950 yuan (t price, the same below) to around 1,750 yuan in May. Under the background of stable prices for phosphate ore, ** and synthetic ammonia, the industry suffered huge losses, and the number of companies that stopped production decreased. By the end of May, the operating rate of the industry had fallen below 40%. According to the calculation of the operating rate, the annual supply of monoammonium in the country is 7 million tons, which shows the characteristics of insufficient supply, and the price increase is an inevitable matter. In fact, by June, the price of mono-ammonium finally stabilized and stabilized. By July, there was a situation in which it was difficult to obtain a demand for goods and the price rose rapidly. In July alone, the price rose by nearly 200 yuan.

What about the trend of the later ammonium? The author believes that in the absence of cost support, the price of mono-ammonium will continue to go well in the short term, and it will be worrisome in the medium term.

From January to June of this year, the output of phosphate ore increased by 13.9% compared with the same period of last year, while the output of phosphate fertilizer decreased by 3.33%. The output of phosphate ore was much higher than that of phosphate fertilizer output, and the phosphate ore continued to be in an oversupply zone. In the short term, prices are hard to rise; ammonia accounts for a small proportion of the cost of ammonium, and there is limited room for price increase; and the stock of ports** increased from about 1.1 million tons in March this year to around 1.5 million tons today. The continuous accumulation of inventory will inevitably bring the price down. Because the increase in phosphate ore and ** is too large, it will not digest phosphate ore and increased stocks even if the ammonium utilization rate increases. Retreating ten thousand steps to say that ammonium can really increase the price of phosphate rock or **, then it will be in a serious oversupply interval. From this we can see that the continued rise in the price of ammonium has not been driven by cost.

Although the loss of mono-ammonium enterprises has been serious in recent years, there has been no withdrawal of production capacity, which means that there are no obstacles to the resumption of production of enterprises that had previously stopped production. As the price of ** is going down, and the price of phosphate ore and ammonia is stable, the production of mono-ammonium is already in the profit range, and the enterprises that had previously stopped production will resume production.

The recovery of the operating rate of enterprises has a process, and the accumulation of social stocks also has a process. It is doomed that the supply of mono-ammonium will remain tight in the short term, and prices will continue to rise.

The slower the recovery of the industry's operating rate, the longer the price increase stays. In the case of generally poor corporate profits, once there are opportunities for making money, I believe that the operating rate of the company must be restored quickly. If the operating rate of the industry recovers to above 70% in August, then the supply of ammonium will increase by more than 500,000 tons per month, and the ammonium will be re-entered into the oversupply range, due to the mid-level of ammonium. Worrying trend.

Monoammonium has undergone two huge price fluctuations since November last year. This is the general rule of product price fluctuation under the background of excess capacity. The destocking of a certain type of product is an opportunity. Destocking is not a case of decapacity. Decapacity can only be achieved through multiple destocking.