Will urea continue to decline despite recent industry attention? The answer is yes, at least in the short term. Especially in Inner Mongolia, Ningxia and other places where factory quotations have decreased significantly, the basic end of fertilizer application in various regions has hindered the development of the urea market due to low agricultural demand. The downward trend in prices also affects the atmosphere of the downstream compound fertilizer market. Compound fertilizer factories and other industrial demand manufacturers lack confidence in urea, and their enthusiasm for purchasing raw materials and selling their own finished products is not high. The upstream and downstream cycles constantly constrain each other. According to rough statistics, as of late July, the price of urea has decreased by 150 yuan (ton price, the same below) or more compared to the beginning of the month. The industry is still concerned about whether urea will continue to decline. From the current situation, urea still has downward risks. Therefore, as the main player in the fertilizer market, the downward trend of urea will affect the compound fertilizer market. Will compound fertilizers and ammonium phosphate suffer from the market trend of fertilizers and other fertilizers?

The compound fertilizer market is not actually going to be very bad, but it may be affected by the decline in urea, and the downstream wait-and-see atmosphere may be strong. However, this is only a short-term situation. In the long run, the autumn fertilizer market still needs to be launched, and there have been fewer payments and purchases in the downstream recently. Although the mainstream prices of compound fertilizers in autumn are indeed higher, they all include certain rebate policies for payments and deliveries, especially for those that can be delivered immediately before the end of July. The preferential policies implemented by some factories are still quite attractive. Therefore, it can be seen that the actual transaction price is not as high as imagined, and the price will gradually be accepted by downstream.

It can be seen that even if the compound fertilizer is affected, it cannot temporarily affect the surface quotation, and the demand is still considerable. The market for compound fertilizer cannot temporarily affect the market for raw material ammonium. Recently, ammonium enterprises have maintained stable quotations, and some companies advocate for stable prices and supply. It is reported that the actual factory price of 55% ammonium powder at Hubei North Factory was 3300 yuan in the early stage, and the overall factory price of 55% ammonium powder ranges from 3300 to 3450 yuan. Yunnan, Guizhou and Sichuan will be slightly cheaper, while Hubei, Henan, Anhui and other places will be slightly more expensive. This price has been going on for about 2 weeks, and the industry believes that high prices cannot be too high, and low prices cannot be reduced much, mainly because favorable factors for ammonium powder still dominate.

The supply of ammonium is still tight, and in recent months, ammonium enterprises have suspended or controlled orders, resulting in a small inventory of the enterprise itself. They mostly execute pending orders and then accept some orders after a period of time, mainly in batches. In addition, during the off-season, the enterprise has conducted annual maintenance, and the overall operating rate is not high, generally around 50%. Some enterprises have limited production due to raw material shortages or environmental inspections, and some of their equipment and raw materials are being converted to other fertilizers. The supply and demand of ammonium have a certain degree of tension, and downstream compound fertilizer enterprises and traders do not have a lot of raw material inventory. Moreover, due to the limited orders received by factories, even if there are purchases in the early stage, the quantity of ammonium is not large. Therefore, there is currently no social pressure on ammonium.

In addition to supply and demand, as well as raw material costs, sulfur prices have continued to rise recently. The price of granular sulfur at Changjiang Port has risen to around 1140 yuan, an increase of around 175 yuan from early July. Although there is a risk of price reduction in the later stage, it cannot be reduced to the price before the price increase in the short term, and in recent years, sulfur prices have been in the range of around 900-1000 yuan. The price of phosphate ore is temporarily stable at a high level, but due to tight local supply, there may be a slight increase in the quotation, and it is difficult to have a significant change in the short term.

From the above, it can be seen that even if urea continues to decline, it will not completely defeat compound fertilizers and ammonium fertilizers. Autumn is the home field of high phosphate fertilizers, but there are still small impacts, and urea affects the overall atmosphere of the fertilizer market, so it should not be underestimated.