Ammonium sulfate: light storage as an opportunity

In 2012, the overall growth of the domestic economy slowed down, and the debt crisis in Europe continued to drag on. In the context of the unfavorable environment, ammonium sulfate has also experienced a relatively bleak year, due to the country’s turn of rare earth minerals. Remediation, all businesses with hope but eventually ended in disappointment.

According to the latest monitoring data from MySteel, in January of 2012, the highest domestic integrated ammonium sulfate price reached RMB 1,222/ton, and after entering March, the market opened a channel of shock and decline to the market in early November. After falling to the bottom, the national comprehensive transaction price fell to the lowest point of 737 yuan/ton, and in 2012, the cumulative decline was as high as 485 yuan/ton, with a drop of nearly 40%.

When it comes to ammonium sulfate, we can easily contact the three major needs of fertilizers, exports and rare earths. However, in 2012, the turmoil of rare earth remediation can be described as continuous, from special invoices for rare earths, to multi-sectoral joint remediation of “black” rare-earth chain, access list for rare earth production, disputes over export quotas between China and Japan, and production of rare earths in north and south rare earth enterprises. The mining area and even the entire rare earth industry have felt chilly. The 2011 ammonium sulfate market, which relied on rare earths, has gone crazy and no longer exists in 2012. Nowadays, the state has not reduced its rare earth remediation, and the “black” rare-earth chain is difficult to survive. Therefore, in 2013, ammonium sulfate will rely on the support of rare earths to be extremely weak.

Starting in mid-November, with the start of domestic chemical fertilizer storage, and the cumulative increase of nearly 100 yuan/ton for two tenders on the 13th and 23rd, the prices of ammonium sulfate in Hebei, Shandong, and Northeast China have been warming up and the market has ushered in. A long absence of spring. After the 13th China Domestic Phosphatic, Compound Fertilizer Production and Sales Association on November 10th, the individual compound fertilizer companies began to gradually increase the purchase of the ammonium sulfate market and promote the transaction price of local ammonium sulfate to rise. Significant signs of start of winterization of chemical fertilizers began, and the mentality of traders everywhere began to improve. Under the background of continuous low inventory, the warming atmosphere of the broader market quickly increased. In particular, the multiple auctions in November further boosted transaction prices in Hebei, Shandong, and Northeast China to varying degrees, and the volume of transactions continued to increase. At the end of the year, the number of compound fertilizer manufacturers promulgated policy on winter storage prices has been increasing. There are many factors that determine the market price in the winter and spring, but the main factors are the production cost, the second is the domestic and foreign economic situation and supply and demand. Affected by the bottom line of the cost, the price of nitrogen fertilizer fell to 1800-1900 yuan/ton, which is basically bottoming out. From the perspective of supply and demand, due to the fact that everyone is not optimistic about the future situation, all dealers are cautiously operating in the second half of the year and basically have no stock. . For compound fertilizer manufacturers, because of the loss, production was stopped earlier. For example, in the past, the company had suspended production overhauls in October, but it began to repair at the end of September 2012. Production has been suspended for nearly 40 days, and many manufacturers have done so. This will lead to a short supply shortage in the winter, which will also affect the market next spring.

In November, the ammonium sulfate bottomed out, and the large number of domestic ports stored in preparation for export reduced the supply of domestic supplies and became another major positive factor. In 2012, with the cancellation of ammonium sulfate export tariffs, the export of ammonium sulfate was favored to a certain extent. In 2012, the export volume continued to increase. From January to October, China exported a total of 1.76 million tons of ammonium sulfate, an increase of 17.4% year-on-year, and a total of 400,000 tons of exports, all reaching a record high. In the National Symposium on Phosphate and Compound Fertilizers Conference Industry Policy, Wu Junyang, Director of the Department of Trade and Economic Affairs of the National Development and Reform Commission, said: “The relevant government departments have noticed the difficulties facing the nitrogen fertilizer and phosphate fertilizer industry, and are seeking all aspects of the annual export tariff scheme. The opinions are still being negotiated and adjusted. It is expected that the fertilizer export tariffs will be generally stable in 2013.” In 2012, the overall domestic chemical fertilizers were better than expected, but the overall international ammonium sulfate also appeared to be “not quite flat”, and the orders were also relatively cautious. The self-sufficiency of ammonium is also increasing, but overall, China's ammonium sulfate exports still have certain advantages, especially in Southeast Asia and South Asia. With the support of zero-tariff and geographical advantages, ammonium sulfate is expected to maintain a steady trend of instability in 2013.

In general, the market for ammonium sulfate that relied on rare earths in 2013 is still difficult to reproduce. Fertilizers and exports will become the two main requirements, and this is destined to be a relatively stable path for ammonium sulfate in 2013, and for ammonium sulfate, 2012 The weakness of the steel market and the loss of coking enterprises, and their pace of recovery in 2013, and how the output of ammonium sulfate will change.