Ammonium sulfate: long-short game pullback finishing

Since the beginning of November, the domestic ammonium sulfate market has bid farewell to the moderately rising "silver ten" market and began to show fatigue
.
At the end of October, the mainstream transaction price of ammonium sulfate in China was 1400~1500 yuan (ton price, the same below), up 7%
month-on-month.
However, in November, with the introduction of bidding and bidding for coking enterprises in various places, most manufacturers have reduced their prices by 10~30 yuan, the mainstream transaction price has dropped to 1350~1450 yuan, and low-end prices continue to emerge, such as ammonium sulfate in Ningxia, Inner Mongolia and other places has been pulled back to 1200 yuan
.

"October's modest upward rally was mainly due to
lower ammonium sulphate production and increased exports.
With the advent of the off-season of downstream consumption and the increase in the operating rate of coking enterprises, it is normal
for the ammonium sulfate market to fall.
However, based on the unlikely possibility of a large increase in production, and the support of exports, it is expected that the probability of ammonium sulfate returning to narrow finishing in the future market is relatively large
.
Liu Changqing, an agricultural material dealer in Xiayi County, Henan Province, analyzed
.

Steady growth in supply

Statistics from Henan Chemical Industry Network show that the comprehensive operating rate of domestic coke enterprises was 76% at the end of September and dropped to 69.
5%
by the end of October.
As a result, the production of coking grade ammonium sulfate has declined
continuously.
"At the end of September, some customers were worried about the shortage of supplies in October and carried out stocking operations
in advance.
This is also one of the
reasons why the ammonium sulfate market rose moderately in October.
Zhang Aiping, an analyst on the network, said
.

According to Zhang Aiping, affected by environmental protection inspections and other factors in October, coke enterprises in various places reduced production or maintenance, resulting in a significant decline in ammonium sulfate supply capacity, and the market began to rise
moderately.
However, with the gradual recovery of the production capacity of coking enterprises and the increase in the operating rate of caprolactam enterprises, the supply of ammonium sulfate has shown a steady growth trend, and the market continues to be long, and the momentum of the market continues to show weakness
.
This can be confirmed
by the continuous decline in the bidding and bidding of coking enterprises in Shanxi, Hebei, Shandong, Henan and other places in early November.
"In the future market, the upward momentum of ammonium sulfate is insufficient, and the trend of returning to finishing will continue
.
" Zhang Aiping believes
.

Demand enters the off-season

"From mid-September to the end of October, the operating rate of the domestic compound fertilizer industry continued to decline, from 38% in mid-September to 25%
at the end of October.
Grassroots dealers are cautious in taking goods and are beginning to resist
high prices.
The number of orders shipped by enterprises began to decrease, and the high price support of the compound fertilizer market was insufficient
.
Coupled with the end of demand, the focus shifted to wheat topdressing and winter storage pre-harvest, and enterprises mainly dumped inventory, and the operating rate fell to a low level again, which also prepared
for the subsequent conversion of production.
Liu Changqing analyzed that considering the off-season of demand, compound fertilizer enterprises have increased their wait-and-see mentality, and there is still an expectation
of a decline in raw material procurement.
This will have a bearish impact
on the later market of ammonium sulfate.

In addition, from the feedback of the market's front-line information, in addition to the lower quotation or bidding price of most enterprises, due to regional differences, some enterprises have increased
slightly.
For example, on November 3, the listing price of Wuhan Esteel ammonium sulfate was raised by 40 yuan, and the implementation was 1730 yuan, and the source of goods was mostly digested in the province, and part of it flowed to East China; Guangxi Shenglong ammonium sulfate raised its external quotation by 20 yuan to 1,500 yuan in early November, and the goods were stable; The factory quotation of ammonium sulfate in Qinghua Province in Inner Mongolia was raised by 40 yuan to 1290 yuan
.
"The regional price difference continues to narrow the shock sorting, and November is expected to become a key stage
for narrow consolidation and bottoming.
" Liu Changqing analyzed
.

Exports remain supported

Although domestic demand has entered the off-season, China's ammonium sulfate export situation is better, which is expected to bring some support
to the domestic market.

According to data released by the National Bureau of Statistics, China's total ammonium sulfate exports in September were 1.
7586 million tons, an increase of 31.
7% month-on-month and 126.
8%
year-on-year.
The national coke output was 39.
65 million tons, a year-on-year increase of 5.
4%.

Among them, the output of coking grade ammonium sulfate is about 397,000 tons
.

Zhang Yi, a senior trader in Shandong, said that from the export data, domestic ammonium sulfate exports showed a continuous growth trend, and accounted for a large proportion of the total domestic demand, and the export volume in September alone reached 35%
of the annual output of coking grade ammonium sulfate.
In January ~ September, the total export volume of ammonium sulfate in China exceeded 7.
83 million tons, which was 1.
95 times the output of coking grade ammonium sulfate in the same period, and the export price was always higher than that of the domestic market
.
This is the main reason
why domestic manufacturers are unanimously optimistic about the export market.

"The continuous growth of ammonium sulphate export orders is still a positive factor supporting the domestic medium and long-term market, so a sharp decline in ammonium sulphate prices is not likely
.
" Zhang Yi analyzed
.

Industry veterans believe that November is a key period
for the long-short game in the ammonium sulfate market.
Recently, the regional market is mixed, the short side has the advantage, but the foundation is still good, the regional price difference in the future market is expected to narrow one after another, and the ammonium sulfate market may continue to show a narrow finishing trend
.