**: low price is difficult to solve the downturn

In the past month or so, from the international to the domestic market, the price of ** has fallen all the way, repeatedly falling below the reserve price in the post-financial crisis era. **When to stop falling not only became a topic of concern for traders, but also became a hot topic in the fertilizer industry. From the perspective of supply and demand and downstream pull, **'s sluggish market is still difficult to ease in the short term.

At the beginning of June, the market began to fall. At that time, Vancouver's FOB price fell by 20 US dollars to 125 US dollars (ton price, the same below), the Middle East, the Black Sea and other places also fell 5 to 15 US dollars. Although international demand remained weak afterwards, major exporting countries tried to keep prices stable. The prices of FOBs in Vancouver, the Middle East, the Black Sea and other places experienced a sharp decline in early June, and prices in major distribution centers in June remained stable. However, at the end of June, the Middle East ** once again led the decline, FOB prices broke through the 100 US dollar mark with the highest drop of 25 US dollars, and Iran, the Black Sea, and Vancouver followed suit. By the end of July, the mainstream FOB prices around the country will only remain around US$75. From 135 US dollars to 75 US dollars, only one month, the international price fell more than 40%.

As an internationally-imported big country, China’s ** prices have followed a downward trend. From about $140 at the beginning of June to 95 at the beginning of July, the fall in China's CIF price is also above 30%, and domestic ** ex-factory prices are unavoidably falling.

** The rapid dive of prices in the past month is the result of the combined effects of changes in international supply and demand and the downturn in the downstream fat market. From the perspective of international supply and demand, 2013 was the default year for the transition from supply shortage to supply increase. At the beginning of the year, the international mainstream analysis agencies have issued warnings that ** entered excess capacity, and the current market can be described as a late interpretation. From the perspective of the downstream fertilizer market, the lack of demand for phosphate fertilizer market and the price drop since April this year have accelerated the exposure of the contradiction between supply and demand. The long-term trend and the short-term supply and demand have pushed ** to the diving platform.

In the short term, it is difficult for domestic ** to ease the sluggish market. The current market supply and demand situation may still drag the market into deeper valleys. From the perspective of supply, in the first half of this year, China’s ** imports were strong, with Fangchenggang, the port with the largest import volume, as an example. In the first half of this year, a total of 1.1075 million tons were imported, a significant increase of 40.9% year-on-year. Fangchenggang ** mainly supplies chemical companies in Sichuan and Yunnan, among which ammonium phosphate companies are the main force for digestion. One side is strong imports, while the other is the decline in Southwest ammonium phosphate manufacturers started, due to poor exports, Southwest Phosphate plant can only maintain about 50% of the operating rate, an ammonium operating rate is maintained at below the low of 30%. It is difficult for such a down-to-earth downstream market to have a real pull on the ** market. It will take time for ** to get out of the downturn.

In the long run, the downstream phosphate fertilizer market is the most important factor affecting the trend of **. From the current situation of ammonium phosphate, there is no shortage of opportunities to be boosted. Due to the unsatisfactory export, domestic ammonium phosphate preparation started earlier this year. Manufacturers slowed down the port and accelerated the pace of domestic distribution. At the same time, China and India released a large order for ammonium phosphate exports, which means that once the large single price is determined , Shipment shipments started, domestic diammonium prices and shipments will bottom out. Once ammonium phosphate is warming up, it will usher in the opportunity to rebound.