In June, the summer compound fertilizer market entered the final sprint stage, and the overall buying and selling atmosphere was greatly improved compared with last month. Although downstream demand is increasing, the price of compound fertilizers is constantly decreasing. As of the end of this week, according to China Fertilizer Network, taking 40% chlorine based summer corn fertilizer (28-6-6-30-5-5) as an example, the mainstream factory price is currently concentrated at 2300-2450 yuan/ton. Low end prices are relatively stable, while high-end prices have declined. Even during the peak season, it is difficult to support the stability of compound fertilizers.

Buying up instead of buying down has led to cautious downstream stocking sentiment due to price declines. However, recently, the urea market has once again "revived" in adversity, with urea prices rebounding in multiple regions and some increases exceeding expectations. Domestic seasonal demand and international urea bidding have driven the market's upward trend, and short-term prices still have an upward trend. However, there may still be suspense in the long-term market, mainly due to the upcoming summer demand end, In addition, the international urea market is not satisfactory, will the temporary increase in urea prices drive the rebound of composite fertilizer prices?

Firstly, the minimum guarantee period is over, and some factory quotations have been appropriately lowered. In order to boost confidence in downstream payment, most mainstream composite fertilizer companies in the early summer fertilizer market introduced a minimum advance payment policy, which lasted until around mid May. With the end of the minimum payment policy, recent quotations from such composite fertilizer companies have shown varying degrees of decline, but there is still a certain gap compared to the low-end level of the market. The first reason is that there is a large difference between high and low prices, and the settlement price of orders in the early stage is relatively high. Once the price drop is deep in the later stage, Dealers' early inventory is difficult to digest; The second reason is that low-priced goods mainly come from small real estate factories, and the production and sales processes are relatively flexible, with prices mainly following the market.

Secondly, due to lagging demand, the replenishment market may progress rapidly. In summer, the prices of compound fertilizers have been "high and low", and dealers' enthusiasm for stocking has been low, resulting in a relatively large surplus gap and concentrated release. Since late May, shipments from multiple factories have shown a "white heat" state, and even local supply sources are slightly tight. However, the peak season demand may not last for too long. The first reason is that there have been frequent rainy weather recently, and there is a strong enthusiasm for grassroots soil planting; The second reason is that the popularity of low-cost composite fertilizers has increased, which has a significant impact on mainstream products and has effectively supplemented the downstream demand gap.

Finally, to digest inventory, there is insufficient support for the favorable future market. As of the end of this week, the overall operating rate of mainstream composite fertilizer enterprises nationwide is around 35.9%, slightly lower than last week. Replenishment demand may not be as expected, and after that, the market trend is likely to be weak. Therefore, most compound fertilizer factories are preparing to gradually reduce operating rates, try to digest inventory, and avoid the occurrence of leftover situations. The start of the autumn fertilizer market may be hindered this year, as the raw material market is still unstable and prices are in a downward channel. The autumn compound fertilizer market is currently uncertain, and both upstream factories and downstream distributors will operate cautiously.

In summary, the rebound in urea prices is not enough to support the rise in composite fertilizer prices. If the demand for replenishment remains strong in the future, the composite fertilizer market may remain weak and stable.