Influenced by Two Factors, P-Fertilizer Prices Still Would Go Down in the Short Term

 In 2019, P-fertilizer prices maintained at a low level. At the end of November 2019, the ex-factory prices of MAP were 1,880 RMB/MT, down 20.61% year on year; the ex-factory prices of DAP stood at 2,202 RMB/MT, down 18.84% year on year. In the near future, P-fertilizer prices still would maintain at a low level. The main influential factors are as follows:
 
First, the prices of raw materials such as phosphate rock and sulfuric acid are low. Among the production costs of raw materials for P-fertilizer production, the proportion of phosphate rock and sulfur is relatively high. More 70% phosphate rock and sulfur is used for P-fertilizer production. Currently, sulfur prices at the ports have decreased to 480 RMB/MT, the lowest since 2008; phosphate rock prices also went down, and 30% phosphate rock prices in Guizhou and Hubei witnessed a year-on-year decline of 100 RMB/MT.   
 
Second, the output of P-fertilizer is less likely to be restricted greatly. In the domestic, the degree of concentration of DAP production is relatively higher than that of MAP production. In the “6+2” meeting held in July, DAP companies proposed to limit production for protecting the prices, and the decline in output was planned to be 40%. However, the reduction in output didn’t improve the prices, cutting down the exports. During January and October 2019, DAP and MAP exports were 5.3419 million MT and 2.1402 million MT, down 13.93% and 9.03% year on year. Only when the output of P-fertilizer decreases greatly, the decreasing trend of prices can be restrained, but the output is less likely to go down greatly.
 
It was predicted that whether the support of materials costs or the measure of limitation on production for protecting prices will fail to halt the decline in P-fertilizer prices. After the starting of fertilizer preparation for spring ploughing, the market of P-fertilizer will get better.