In mid February, as the festive atmosphere gradually faded, the purchase and sale of fertilizers in the market were also recovering in an orderly manner. Although the market for compound fertilizers has limited changes after the holiday, the raw material market is not very stable. The prices of some raw materials such as urea, potassium chloride, and potassium sulfate have rebounded, with urea prices rising relatively narrowly, while the atmosphere of price increases in the potassium fertilizer market is very high. The nitrogen and potassium fertilizer market is strong, and the actual cost of compound fertilizer raw materials is higher than before. Recently, there have also been voices of price increases in the market, but upstream enterprises have been slightly slow in their price adjustment activities.

As of now, according to China Fertilizer Network, the ex factory prices of 45% sulfur based balanced fertilizers (such as 15-15-15) from some mainstream compound fertilizer enterprises are concentrated at 2750-2850 yuan/ton, which is basically the same as before the holiday. However, due to the strengthening of cost support, some compound fertilizer enterprises have gradually cancelled relevant shipping preferential policies, with a range of about 30-50 yuan/ton. A small number of enterprises have also informed downstream customers that the ex factory prices will soon be raised. In short, the atmosphere of price increase in the compound fertilizer market has indeed increased, and whether the price increase can be confirmed still needs to be viewed with caution.

Firstly, there are still hidden dangers in the raw material market. The prices of nitrogen, phosphorus, and potassium fertilizers fluctuated with each other, and the abnormal fluctuations in the raw material side led to a chaotic market situation in the compound fertilizer market. Except for the rise in urea and potassium fertilizer prices, there have been no obvious signs of improvement in other raw material markets. The ammonium chloride market continues to remain weak and stable, and market sentiment is relatively low; The price of ammonium in enterprises is subject to further discussion, and downstream demand has not yet been released in large quantities. Fortunately, the cost of raw materials such as sulfur remains high. The raw material market is dominated by the positive trend of potassium fertilizer, while the market for nitrogen and phosphorus fertilizers is not very ideal, and there are even hidden dangers in the long-term trend. Therefore, the price increase confidence of compound fertilizer enterprises is slightly insufficient.

Secondly, the downstream demand situation is still unknown. Not only is the situation of upstream compound fertilizer factories chaotic, but downstream distributors are also somewhat at a loss. The demand for winter wheat topdressing in the Central Plains region is relatively close, and the nitrogen and potassium topdressing market is still lukewarm. On the one hand, weather factors have delayed local downstream topdressing activities. On the other hand, urea has a higher cost-effectiveness compared to nitrogen and potassium topdressing, and the fluctuation range of urea prices has narrowed, resulting in an increase in downstream purchases of urea. Other regions such as Northeast and Northwest are still far from the official fertilizer season in spring, and terminal market purchases and sales have not yet begun.

Finally, companies may intentionally use price increases to promote transactions. In fact, the compound fertilizer market remains somewhat stagnant after the holiday, and compound fertilizer companies dare not make significant adjustments. The feedback from the end market is also very average, and distributors may not immediately replenish their low-priced inventory until it is fully consumed in the early stage. Considering the rise in raw material costs, compound fertilizer companies have taken advantage of the trend to create a price increase atmosphere, buying up instead of buying down. Price increases may stimulate downstream stocking enthusiasm, accelerate the execution of early orders, and alleviate existing inventory pressure. Therefore, it cannot be ruled out that the company intends to promote new order transactions through price increases.

Overall, there have been changes in the market since the beginning of the spring season. The good news is that there is a positive trend in the demand for compound fertilizers, and downstream demand may become a key factor in the market's improvement.