The 2021 export is really hot! 2022 Ammonium Sulfate Continues to Bull?
Looking back at 2021, the price of ammonium sulfate can be summarized in sixteen words: "Exports are booming, the increase is amazing, and the year-end fall is still high." What is the market? Let’s review the ammonium sulfate market in 2021:
First of all, exports still accounted for 60% or even 70% of total demand. From January to November, the export volume of ammonium sulfate was 9.188 million tons, a record high, an increase of 200% from the 76.57 million tons in the same period in 2020. The price of ammonium sulfate is very, very large, and this is the root cause of the rise of ammonium sulfate. In terms of export prices, China’s offshore guidance price for caprolactam-grade ammonium sulfate has risen intermittently from US$114-118/ton at the beginning of the year to US$360-390/ton at the beginning of December, and fell to US$**/ton at the end of the year, which is almost a weekly price. They are all higher than the same period in previous years, breaking the highest record in history. This is one of the reasons why the ammonium sulfate factory reached 2000 yuan/ton or even the high-end once reached ** yuan/ton in late October, and the price was abnormally high from November to early December. The key point is that the import and export of chemical fertilizers will be subject to legal inspection from October 15th. Ammonium sulfate is not listed. The use of ammonium sulfate to replace urea and the export of ammonium oxide makes the price of ammonium sulfate unattainable.
The price of ammonium sulfate failed to exceed RMB 2,000/ton again in November-December, not because the export price was not strong, but because the industry rumored that ammonium sulfate will also be inspected in December, that is, ammonium sulfate may not be exported, and the rumor was finally confirmed to be false.
Secondly, the delivery of chemical plants, rare earths, and other aspects is relatively stable. Only due to the epidemic situation, Myanmar has been closed several times. Roughly speaking, the number of exports to Myanmar through the Yunnan border trade is slightly lower than that in 2020. This is certain in the export data. The manifestation of the situation: several lysine plants in the Northeast receive stable goods. During the peak season for fertilizer preparation in the northeast from November to December 2021, lysine plants and blended fertilizer plants only moderately catch up with the high price of ammonium sulfate.
Third, on the occasion of this spring, summer, and autumn fertilizers, domestic compound fertilizer companies, extruded pellet factories, distributors, especially some factories that use ammonium sulfate as formula fertilizer, have received a large amount as always, but since the second half of October From the perspective of a single ammonia element, the price of ammonium sulfate is much higher than that of dry urea, and the quantity of goods received in these aspects has plummeted.
In addition to the rising export volume and price, another key factor for the high price of ammonium sulfate is that most of the time in 2021, the price of the urinary cord is much higher than that in 2020 (take Shandong as an example. 3200 yuan, and the low-end factory will be about 1600 yuan in 2020, and the high-end yuan). Some compound fertilizer companies and distributors that usually use ammonium sulfate instead of urea will switch to ammonium sulfate due to the tightening price of urea. In 2021 most of the year, international urea prices are much higher than in 2020. Under the epidemic, the international urea supply has decreased. Compared with other sources of ammonium sulfate, the price of ammonium sulfate in my country has great advantages, especially because Ammonium sulfate does not require legal inspection, and the total export volume of ammonium sulfate is much higher than that in 2020. The price of ammonium sulfate will naturally run at an abnormally high level.
Finally, on the supply side, Shandong Hualu Hengsheng, Lunan Chemical Industry, and Inner Mongolia Qinghua have officially put into production the new caprolactam-grade ammonium sulfate production capacity. The supply in this area is considered to have increased moderately; Shanxi and other places have new coking capacity. The output of by-product ammonium sulfate experienced a moderate increase after the low point last year; the output of cyanuric acid plants and power plants did not change much. It is estimated that the supply of ammonium sulfate in 2021 will be higher than that in 2020 (according to the data of the Asian Ammonium Sulfate Alliance, the national ammonium sulfate production capacity in 2020 is about 14 million tons).
In short, the demand side is very strong, and the supply is only slightly increased temporarily. The price of ammonium sulfate has been rising all the way, and the increase has been more and more large. Only at the end of the year due to the sharp drop in the international bulk raw material prices and the increase in sea freight: Brazil and other goods slowed down, and some International traders have made substantial cuts for three consecutive weeks. Of course, the mainstream ex-factory price of 1300-1400 yuan at the end of the year is still much higher than that of previous years (only 2012-2013 had similar high prices).
After reviewing the past and learning the new, ammonium sulfate may continue to show a bull market in 2022! Only look at exports. As long as ammonium sulfate exports continue without legal inspection, exports should continue to strengthen in the first half of the year and prices will run at a high level! Other fertilizers such as urea may be in the second half of the year. Exports are resumed, and the price of ammonium sulfate may return by then
Reasonable prices within 1,000 yuan/ton need to continue to pay attention to exports, especially changes in the international environment. For more detailed analysis, welcome to become a member and follow China Fertilizer.com's ammonium sulfate annual report.
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