How far off is a stable compound fertilizer winter storage if urea can be stabilized?

　　With the gradual end of autumn fertilizer demand in various regions, the winter fertilizer storage market has once again become the focus. Compared to previous years, the difficulties faced by winter fertilizer storage this year are self-evident, especially for compound fertilizers. Up to now, only a few compound fertilizer companies have tentatively released winter storage quotations, and the policies are mostly buyouts or interest-bearing prepayments, with almost no guarantees. Other companies' official prices are still under negotiation. Although some companies have conducted some phased collection activities in the early stage, the main market trend has not yet been clarified, and downstream distributors are also cautious.

　　Recently, the main topic in the fertilizer market has been urea. After several ups and downs, the domestic urea market shows signs of stabilization. In addition to factors such as coal costs and export markets, changes in both supply and demand will largely influence the development of the urea market. Given the gradual start of procurement activities by compound fertilizer companies and traders, urea demand may improve relatively. Coupled with the possibility of reduced supply in some areas due to winter gas restrictions, positive factors have reappeared. If the urea market can recover stability, winter storage of compound fertilizers may not be far off.

　　First, the Price fluctuations of phosphate and potash fertilizers are limited. After the peak season of autumn demand, the price of diammonium phosphate has become lukewarm, and even the Price has fallen slightly. Most companies have few outstanding orders, and the market is expected to remain sluggish for some time; the Price of potash fertilizer is upward, with sporadic quotations for port and border trade potassium chloride at high levels. Domestic potash may experience supply shortages due to winter gas restrictions, increasing market reluctance to sell, tight supply, and making it difficult to find low-Price orders in the short term. Once the market for nitrogen, phosphorus, and potassium fertilizers stabilizes, the cost of compound fertilizers will be determined accordingly, and the winter storage quotations and policies of enterprises will naturally come to fruition.

　　Second, downstream existing inventories are at low levels. As an important season of the year, the spring fertilizer market is often expected to perform well, and the amount of downstream demand is conceivable. In order to ensure the normal supply of grassroots fertilizer demand, distributors usually prepare inventory in advance. However, many are cautiously watching this year, and existing inventories are all at low levels. One reason is that the year-on-year increase in the Price of compound fertilizers is too large, and the acceptance level of grassroots is not high, making it a good choice to seek alternative products with lower Price levels; the second reason is that the time is far from the sales season, during which the fertilizer market may fluctuate significantly. Once the Price falls, the sales of distributors' early inventories may be hindered.

　　There are concerns about subsequent upstream supply. So far, the overall operating rate of large compound fertilizer plants nationwide is around 28%, an increase of about 1% week-on-week, after falling for several consecutive weeks. Since the autumn market, the operation of compound fertilizer plants has not been ideal, mainly due to insufficient downstream demand and slow release during the peak season. The high and unstable Price of raw materials has forced compound fertilizer companies to cautiously procure and control inventory pressure; in addition, some areas may face environmental pressure during winter centralized heating, and situations of phased production restrictions and shutdowns are bound to occur. Therefore, the supply situation of compound fertilizers upstream may also affect market development.