Review 2022 the price of ammonium sulphate: “rapid increase & slow decrease in shock”
Changes in ammonium sulfate price in 2022 are still closely related to the international environment. Due to the Russia-Ukraine war, the international price rose sharply. In the second half of March and mid-May, the price reached the annual high. The coking by-product ammonium sulfate in Shandong, Henan and Hebei was once close to 1,800 yuan/ton (year-round highest value). Due to the European energy crisis, the export volume in China is very large, and it suddenly rose to about 1,500 yuan/ton in early September. The periods of obvious decline are from the beginning of January to the end of February, the second half of May to the end of August, November and December.
First, 70-80% for exports.
From January to November, the export volume of ammonium sulfate was 11.276 million tons, a record high, an increase of about 23% compared with 9.188 million tons in the same period of 2021, and an increase of about 2.09 million tons, which greatly supported the price. In terms of export prices, China’s caprolactam-grade ammonium sulfate FOB guide price dropped from about US$320/ton at the beginning of the year to about US$237/ton on the eve of the Russian-Ukrainian war on February 24th, and then reached a peak of US$385/ton in mid-March. Then it slowly fell to about US$180/ton at the end of December. The ex-factory price converted from this low price is still above 1,000 yuan/ton. The key point is that from October 15, 2021, the import and export of chemical fertilizers will require legal inspections, and ammonium sulfate will not be listed. It will replace urea and ammonium chloride for export so that the quantity and price of ammonium sulphate will be high.
At the beginning of 2023, it was rumoured that ammonium sulfate will also be legally inspected and may not be exported, and it was finally confirmed that the rumour was false.
Second, domestic demand is stable and good.
Purchases from chemical plants and rare earth have been steady. Only due to the relationship between the epidemic/politics/economy, Myanmar has closed customs several times. The data shows that the quantity exported to Myanmar through the Yunnan border trade is slightly higher than that in 2021, and ammonium sulphate in the south has always been higher than that in the north.
When fertilizing in the spring, summer and autumn of 2022, domestic compound fertilizer companies, extrusion granule factories, distributors, and especially some factories that use it as formula fertilizer, will purchase moderately.
Third, the urea price run a high level for most time in 2022.
Taking Shandong as an example, the low-end factory will be about 2,200 yuan/ton in 2022, and the high-end will be 3,200 yuan/ton. In 2021, the low-end will be about 1,800 yuan/ton, and the high-end will be 3,200 yuan/ton. The price of urea is high (nitrogen content 46%), Ammonium sulfate cannot be lowered (nitrogen content is 20.5%, the low-end factory will be about 1,050 yuan/ton in 2022, and the high-end will be 1,775 yuan/ton).
The international urea price is also very high for most of the time in 2022. The international urea supply is reduced under the epidemic/Russia-Ukraine war/European energy crisis. China’s ammonium sulfate has a great advantage over the supply and price of other countries, plus it does not require legal inspection, and the total export volume will continue to be higher than that in 2021, so the price will naturally run at an abnormally high level.
Rapid increase & slow decrease in shock
It can be seen that the demand is very strong, and the supply is only slightly increased for the time being. Each round of ammonium sulfate price rises more rapidly, and each round of decline is a tentative and slow decline. Of course, the mainstream ex-factory price of 1150-1200 yuan at the end of the year is still much higher than before June 2021 (only 2012-2013 had similar high prices).
Outlook
The export legal inspection of urea and other chemical fertilizers will likely continue. There is still a large international demand for ammonium sulfate, and the price may rise at any time. The proportion of domestic demand is relatively small, and whichever urea or ammonium sulfate is more cost-effective can be used, which still does not affect the overall situation.
In 2023, the situation of high export volume and price can still appear again. Continue to observe when it exports will be concentrated. You only need to be careful of changes in the international environment and a sharp drop in urea prices.
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