In August, the sun was scorching. In recent years, the temperature in all parts of the country has continuously reached an all-time high, and flooding disasters are obviously more than in previous years. Relatively calm is the fertilizer market seems to be in a deadlock, after the fall fertilizer first round of receipts, followed by a slump. At present, most of the pre-harvest policies of compound fertilizer are mainly interest-bearing and bottom-keeping. The downstream acceptance is not good, the enterprises are helpless, and the overall market is weak.
It is certain that the price of compound fertilizer has been relatively stable in recent weeks, and there are not too many supporting factors for price increase and price drop. However, recently, a few enterprises have heard that they want to raise prices through the heat of “environmental protection inspection”. If we can “promote stability through price increase”, we can not only relieve the pressure of enterprises’shipment, but also promote it. The release of downstream demand reduces the risk of market lag. Otherwise, the only thing waiting for compound fertilizer is “price reduction promotion”.
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First, raw materials are in a collective downturn. In recent years, not only the compound fertilizer market has caused headaches, but also the raw materials have not been too much surprise. With the fermentation of labeling heat, the domestic urea market can hardly escape the fate of callback. At present, the price of the main producing areas has declined more or less than in the earlier period. In the case of low agricultural demand and poor industrial demand, the latter period is not optimistic. As early as before the start of the fertilizer market in autumn, the so-called hot fertilizer ammonium has shown a rise in price. Willingness, unfortunately, contrary to wishes, the effect of enterprise rally is not obvious, temporarily maintaining relative stability; up to now, the amount of potassium chloride stock in the port is about 3 million tons, the demand is not warm, the follow-up market can be imagined.
Secondly, the downstream demand is insufficient. In addition to the weak raw material market leading to insufficient price support for compound fertilizers, the current downstream demand is also one of the negative factors. After the end of the early low-price advance, downstream began to wait and see. Whether interest-bearing or bottom-keeping, dealers are cautious. The first reason is “off-season price increase” and “off-season price”. Psychology still exists. In the past, such phenomena often occur, which weakens the confidence of dealers in reserve. Compared with early payment, it is more safe to collect along with the sale. The second reason is that this summer’s abnormal climate, frequent drought and flood disasters, to a certain extent, undermine the normal progress of agricultural production and life, which also leads to the relative weakening of enthusiasm for downstream reserve farming.
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Finally, we should put an end to the “one-size-fits-all” approach to environmental protection. From July 10 to July 15, less than a week later, the first batch of eight Inspectorate groups of Central Eco-environmental Protection Inspection in the second round have all been stationed. With the “environmental protection” storm coming again, the production situation of enterprises in some areas will be limited, but definitely not the so-called “one size fits all”. In the supervision work of the central ecological environment protection, it is firmly forbidden to protect the ecological environment in a “one-size-fits-all” manner, and to adopt simple and crude acts such as emergency shutdown and shutdown, as well as perfunctory measures such as “all shutdown” and “stop first and then say” to deal with the supervision indiscriminately.
In summary, as of this weekend, the overall starting rate of large-scale compound fertilizer enterprises in China is around 43%, and the weekly ratio has dropped by 4%. In addition to environmental protection, weather conditions and downstream demand are the main factors. It is expected that the compound fertilizer market will remain weak and stable in the short term.
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