International ammonium phosphate situation forecast in the second quarter

International demand analysis of ammonium phosphate The global use of phosphate fertilizer is inseparable from crop cultivation and food prices. In the years when food prices are high, farmers’ purchasing power is relatively strong, and the enthusiasm for purchasing fertilizers is high, and the use of phosphate fertilizers will increase. In contrast, the use of phosphate fertilizers is reduced in the years when the crop prices are lower. The survey conducted in 2013 showed that the global food price fluctuates significantly during 2012-2013, but overall it maintains an upward trend. As the global population grows, food prices will continue to rise in the future, and the rigid demand for phosphate fertilizers will continue to exist. In addition, with the development of the global economy, with the expansion of aquaculture and animal husbandry in addition to grain cultivation, the demand for food will increase, so the strong demand for phosphate fertilizer will continue to rise after 2013.

The share of phosphate fertilizer demand decreased by 2.7% in 2012. According to IFA's forecast, global phosphate fertilizer demand will recover in 2013, with a growth rate of 3.5% and phosphorus pentoxide of 41.4 million tons. The IFA also pointed out that in 2013, the global import of DAP was basically the same as in 2012, between 14 million and 15 million tons. In 2012, the trade volume of diammonium phosphate was 6.6 million tons. It is estimated that the trade volume in 2013 will be about 6.7 million tons. Imports in most parts of the world are relatively stable, and a slight decline in Southeast Asian imports will be offset by the increase in shipments in Africa and Latin America.

Factors Affecting China's Phosphatic Fertilizer Trends For manufacturers, the biggest influence on the trend of phosphate fertilizer production is excess production capacity and competition is fierce. The second is that the window periods are too concentrated and are concentrated between May 16 and October 15. Third, the price of compound fertilizers for substitutes for phosphate fertilizers is too low, and the use of compound fertilizers instead of phosphate fertilizers has led to a decline in demand for phosphate fertilizers. Fourth, the diammonium consumption pattern has changed.

For circulation companies, first of all manufacturing and operating costs increase year by year, low thresholds result in fierce competition, and profit sharing leads to decline in individual profits. Second, fake and deteriorating fertilizers are rampant, and counterfeiting is only a symptom. Third, the price of urea fluctuates greatly in the past three years. Urea price fluctuations directly affect the price of phosphate fertilizer. At present, the phosphate fertilizer industry is more difficult to operate and producers are constantly adjusting their strategies based on domestic and international demand. Dealers need to pay close attention to market changes and conduct in-depth research on the market, and how to develop the market on the premise of ensuring profits.

Export volume stabilized in 2013 China's ammonium phosphate began exporting after meeting its own requirements in 2007. According to the statistics of ammonium phosphate export, the export volume of diammonium phosphate remained stable in the past 3 years, at about 4 million tons. The export volume of monoammonium phosphate was 870,000 tons in 2011, and it declined in 2012 to about 59 million tons. This is related to the change in the structure of fertilizers in the world. In the Southeast Asia, there was a large demand for monoammonium, which was used to make BB fertilizers. However, in the last two years, diammonium was gradually used instead of monoammonium. The export volatility is heavy calcium superphosphate. In 2010, the export volume was 1.21 million tons. In 2011, it increased to 2.43 million tons, and in 2012 it dropped to 850,000 tons. The reason is that export tariffs did not include heavy calcium superphosphate in 2011, so the export volume soared. After the policy change in 2012, the export volume returned to normal. In addition to policy reasons, this is also related to the continuous reduction in the international demand for heavy superphosphate. Not only international and domestic areas that use heavy calcium phosphate also gradually reduce the use of heavy calcium.

India is an important exporter of ammonium phosphate in China. From the proportion of ammonium phosphate exported to India in the past three years, it is showing an upward trend year by year. For example, in 2012, DAP exported to India reached 665,000 tons, accounting for 16% of total exports. Therefore, the strength of India's demand will directly affect China's exports of ammonium phosphate.

As for the export tariff policy of ammonium phosphate, the policy of diammonium phosphate and monoammonium phosphate will be exempted from tax in 2013. In addition, export tariffs in 2013 decreased by 2%-5% compared to 2012. The window period in 2013 has been extended from May 16 to October 15. This shows that the country’s export policy has been appropriately relaxed, and it has prolonged the export season in the off-season and reduced tariffs. As a resource of agricultural products, the state does not encourage exports. In the long run, resource-based exports will be strictly controlled.

In the second quarter, the international situation of ammonium phosphate is forecasted as the main production raw material for phosphate fertilizer. The price fluctuation controls the trend of phosphate fertilizer prices. It is roughly estimated that in 2012 China's phosphate fertilizer exports accounted for 21.8% of the total trade volume in the international market, and ** imports accounted for 38% of international trade volume. It can be seen that the impact of China's export of phosphate fertilizers and imports on the world's phosphate fertilizer market is large, and it can be speculated that China and the global phosphate fertilizer market are highly relevant.

Driven by demand in the United States and South America in February, the global phosphate fertilizer market began to rebound. On April 4, the FOND price of US DAP was US$510/ton, and in the Middle East, DAP FOB was US$515/ton. Compared to the low season, the price of USD 475/ton DAP has rebounded in April. It is predicted that the current price of international diammonium phosphate has bottomed out, but the trend in the latter period is not stable. India is also actively negotiating with Chinese companies, hoping to lower prices for imported ammonium phosphate, but domestic companies still hope to extend the negotiation period.

From the perspective of global supply of ammonium phosphate, the supply of Saudi ammonium phosphate will increase by about 700-120 million tons in 2013. China's supply will increase by about 500,000 tons. From the demand side, the inventory of DAP in India will increase by 15% in 2013, so the import volume of ammonium phosphate will decrease slightly. Demand for ammonium phosphate in Argentina has shown a recovery, but due to its small base, it has little effect on global demand. Brazil's demand for diammonium phosphate is limited, and more is the impact on the phosphate fertilizer market through the demand for monoammonium and heavy superphosphate.

Global ammonium phosphate excess production capacity is a major trend, and the growth in global demand in the past two years has been relatively stable. For China, the largest import market for diammonium phosphate in India still has a lot of variables. It is predicted that the global diammonium market will exceed supply in 2013. Due to the occurrence of extreme weather, it may exacerbate the diammonium surplus, so the global phosphate fertilizer price will not exceed the expected increase, on the contrary need to prevent price declines.

In the later period, the trend of phosphate fertilizers in China shifted to the international market. After the opening of the window period on May 16, the phosphate fertilizers were gradually exported. As the key exporter, India’s export price for diammonium phosphate is expected to be between 510-525 US$/ton. From September to October, it is the peak period of domestic demand for phosphate fertilizers. If the export period of 5-10 months is smooth, the domestic market for ready-to-use fertilizers in the autumn will be mainly stable.