Export increased coke production to reduce downstream fertilizer
After the consolidation in January, the domestic ammonium sulfate market reappeared in the late August. Last week, the domestic mainstream transaction price was 520~690 yuan (ton price, the same below), and the weekly increase was about 3%. Recently, the prices of enterprises in various places have been firm, and some regions have exceeded 700 yuan, showing a steady trend.
Shandong trader Zhang Yi said that most of the recent production enterprise inventory has been transferred to traders’ warehouses or ports, and coal chemical enterprises in Shanxi and Inner Mongolia have even reached zero inventory, which laid the foundation for the steady rise of ammonium sulfate.
Export orders drive demand
China Chemical News reporter learned from the port importers and exporters that due to tight supply in northwestern Europe and the small supply of Russia and Belarus in September, the international ammonium sulphate orders began to increase in mid-to-late August, driving the market price to rise steadily.
It is understood that the recent closure of the SECO Fertilisants plant in France has reduced the capacity of 100,000 tons/year of ammonium sulphate; due to production problems in many local factories, the supply of granular ammonium sulphate in northwestern Europe has become increasingly tight; Brazil’s willingness to find goods has increased due to insufficient local supply. The new demand for coking ammonium sulfate in northern China appears. It is planned to find 100,000 tons of goods from China from September to October, and the price is higher than the domestic market.
This round of international orders has increased, allowing many exporters to increase their efforts to purchase inventories, further stimulating domestic supply and the transaction price has also increased. This has brought about a new round of growth in the long-stayed export market, providing a basis for the future of ammonium sulfate.
Environmental protection boost production pre-reduction
According to the person in charge of Henan Xuchang Changsheng Environmental Protection Technology Co., Ltd., the second round of environmental protection inspectors continued to deepen. In August, the inspection team settled in Henan and Shanxi, and the operating rate of local coke enterprises continued to decline. In Jiangsu, in late August, the coking enterprises in Xuzhou were once again suspended from production, and the driving time was not fixed, resulting in a reduction in the supply of coking ammonium sulfate and a steady increase in prices. In Xinjiang and Inner Mongolia, most coal chemical companies were in an overhaul state in August, further reducing social supply. For example, when the Inner Mongolia Datang Coal Gas Company shut down and repaired in late August, ammonium sulfate was cleared, which became one of the reasons for the promotion.
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Meng Jianjie, manager of Zhengzhou Dayou Gas Marketing Department, said that the recent use of natural gas in many coal-fired boilers in various places has led to further reduction of ammonium sulfate produced by desulfurization of coal-fired boilers. It is expected that this reduction in production will continue.
Autumn stocking starts early
Feedback from Inner Mongolia, Hebei and other places indicates that in August, due to the reduction in supply, traders prepared for the fall preparation in advance. The increase in port demand, the reduction of production by environmentally-friendly coke enterprises and the supply of fertilizer in autumn have created a source of competition, which has caused traders to worry about tight supply and prepare for storage in advance. Recently, the ammonium sulfate of mass production enterprises has rapidly flowed to the stocks of traders, resulting in a decrease in social circulation, and it is impossible to rule out the possibility of speculation in the market.
According to Wang Liwen, business manager of Xinjiang Xintian Coal-to-Gas Co., Ltd., due to transportation reasons, most of the ammonium sulfate produced by the company is digested locally. Now it is basically out of stock, and even if it is in stock, it is difficult to transport it to the inland market. Affected by the overall market situation, the local ammonium sulfate price has steadily increased, and the current ex-factory price has reached more than 450 yuan.
Market participants believe that the recent depreciation of the renminbi will continue to favor the export market and form price support. However, environmental factors have also affected downstream compound fertilizer companies, resulting in no significant increase in demand for ammonium sulfate. Therefore, domestic exports and fertilizers are lagging behind, and whether there is a need to make up the surplus can continue to be uncertain. September is expected to be a key node in the trend of ammonium sulphate market, and should be focused on.
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