CCM: China’s ammonium phosphate market remains stagnant in Aug. 2016 09-02-2016

In July and Aug. 2016, influenced by the EI Nino, there were heavier rains than usual in Southern China, leading to different degrees of flood disasters and significantly harming agricultural production in many regions. As a result, China’s ammonium phosphate market remained stagnant and transitions were very limited even if the fertiliser storage for increasing demand in autumn had already begun.



                                                                                         Source: Baidu


- Monoammonium phosphate (MAP)


Sales were dull and the market price kept falling. As of mid-Aug. 2016, the average quotation for 55% MAP powder stood at USD252/t (RMB1,670/t), down 1.76% MoM. The main reason for this was that compound fertiliser manufacturers had sufficient inventory and purchased limited MAP, according to trade source.


- Diammonium phosphate (DAP)


The domestic market was so depressed and manufacturers suffered heavy pressure from their inventory and from downstream companies’ requests for lower prices. As of mid-Aug. 2016, the average quotation for 64% DAP was USD338/t (RMB2,240/t), down by 6.67% MoM. In this context, many manufacturers mainly focused on their export business. However, there were also limited new orders. The FOB price was between USD327-330/t.


“DAP manufacturers are facing more serious challenges in sales than in previous years. The market price may continue to fall considering that market conditions will not recover in the short term,” commented trade source to CCM, “What’s worse, the ex-works price of 64% DAP in some regions may even drop to as low as USD302/t (RMB2,000/t).”



 

According to CCM’s research, recently, the Chinese government has been carrying out environmental protection inspection in chemical fertiliser enterprises in Henan Province and then in Hubei Province later. According to trade source, many enterprises have been forced to suspend production for transformation and upgrade so far. This helps to ease overcapacity in the market and ammonium phosphate manufacturers are able to reduce inventory more quickly, supporting the market to recover.


In addition, from 1 July, 2016, phosphorus ore is taxed by value instead of by volume, the mineral compensation expenses of all resource categories are cut down to zero, collection of the price regulation fund is stopped and the local charging funds set up illegally and targeted at minerals are cancelled.


These are favourable for phosphorus ore enterprises and help them reduce production costs. For phosphate fertiliser enterprises, their costs for purchasing phosphorus ore also decline which means bigger profit margins for them. For example, Hubei Xingfa Chemicals Group Co., Ltd. expected to reduce its tax by USD3.02 million (RMB20 million) in 2016 after the phosphorus ore resource tax rate was cut from 10% to 7%.  

 

This article comes from Phosphorus Industry China Monthly Report 1608, CCM



 

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

 

Tag: fertiliser  phosphate

 

Subscribe to our Newsletter

 


Next Press