Fertilizer sales active prices are still not warming

In March, the spring plowing and start-up fertilizers were launched one after another. The sales of compound fertilizer market gradually became active, but the price fell under pressure. The main pressure comes from the price reduction of raw materials and the slow digestion of stocks. As the market improves, the activity will increase, but the price will be less favorable. At present, wheat in the Huang-Huai area is being given greenbacking and jointing fertilizer, mainly urea and high-nitrogen compound fertilizers. The market demand is slightly weak, and it is difficult to prevent the compound fertilizers from falling. Recently, many companies have stepped up promotional efforts and offer prices have been reduced significantly.

It is understood that the compound fertilizer price pressure comes from three aspects:

First, the raw material market is in the doldrums and the cost is lacking in support. The urea market remained weak. Although individual companies raised their offers after the holiday, high-end prices have fallen after the game. The conclusion of the recent nitrogen fertilizer market analysis meeting shows that in addition to the tight supply situation in some regions in the spring market, the general environment is not optimistic. There was no significant improvement in the ammonium market, downstream demand decreased, company inventories increased, and trading was slow. Potash sales have become more prosperous, but the port has more inventory and prices have not improved.

The second is the slow digestion of inventories and the slow recovery of business operating rates. Many manufacturers report that in the spring of 2016, sales of compound fertilizers have declined compared with previous years. It is estimated that the current utilization rate of compound fertilizer is less than 40%, and the areas with higher operating rates are concentrated in Shandong and Hubei, and the operating rates of southern enterprises such as Jiangsu and Jiangxi are relatively low.

Third, the decline in food prices affects farmers' income, which is not conducive to dealers preparing fertilizers. The unsatisfactory sales prices of corn and rice also coincided with the crucial period of the food price reform. Farmers are reluctant to sell and the grain can not be realised, directly affecting the return of dealer funds. More and more companies have increased their preferential prices. The decline in fertilizer prices has increased from 50 to 100 yuan before the winter storage to 50 to 200 yuan per ton. In addition, part of the production and sales center of the compound fertilizer company may shift to summer corn preparation. In the middle and late of this month, the spring plough and fertilizer will be launched on a large scale. Due to the demand support, the operating rate of enterprises will slowly rise, but the price will lack support.