Prices of Agrochemicals Drop        

Ammonium chloride   

Since March 2009, the domestic demand for ammonium chloride has been sluggish. The price of agricultural grade wet ammonium chloride dropped from the highest point of RMB820/t to the lower point of RMB500/t in late June, and the price of dry ammonium chloride for agricultural use depreciated from RMB900/t in the middle of March to RMB 650/t in late June. The domestic production capacity for ammonium chloride is seriously superfluous, while export is an effective way to solve such superfluous production capacity. To accelerate exports and ease domestic oversupply, China now adjusted export policies for fertilizers. From July 1st, 2009 on, a 10% of interim export tariff for ammonium chloride will be levied in stead of the existing 50% special tariff.

Urea

During the first week of June, China experienced price rebounds of urea in the portal regions and adjacent areas, and the price markup in some areas of Shandong, Hebei, Henan, Anhui provinces was dramatic, with an increase of about RMB60-80 per ton. The quotation price in eastern China was between RMB1 700/t and RMB1 740/t ex-factory, while in other regions, the manufacturer's price for urea descended slightly, and the ex-factory price in Hubei province was relatively lower, only RMB1 550-1 580/t. In the second week of June, the price drop in northern China offset the price increase in the preceding week, while the price in southern China was relatively stable. And then, the overall price kept dropping till the fourth week, with a fall of about RMB60 in northern and eastern China. The ex-factory price was RMB1 600/t in Hebei province at the end of June, and RMB1 550-1 580/t in Shandong province. In southern China, the price dropped by approximately RMB20/t throughout June.
    With less favorable factors to support it, the price in northern China is extremely possible to go down to RMB1 500-1 550/t.

Liquid ammonium    

During the first week of June, the domestic price for liquid ammonium kept stable, and the national total output continued to shrink. In northeastern China, the price was at RMB2 200-2 400/t, with a softened downstream demand.
   In the second week, the market for liquid ammonium in northeastern China gradually warmed up, and the price in Heilongjiang province rose to RMB2 450/t, and the main ex-factory price in Jilin province reached RMB2 500/t.
   In the third week, the overall price in northeastern China went up, and the quotation of Daqing Petrochemical Company was RMB2 600/t. The trading volume in northern China started to warm up, and the price for synthetic ammonia with coal as raw material was at around RMB2 000/t, with nearly zero profit. The main ex-factory price in Hebei province was at RMB2 300-2 400/t.
   In the fourth week, the domestic market for liquid ammonium became sluggish, with the price falling. The main ex-price was RMB2 250-2 300/t in Shandong province, and RMB2 300-2 400/t in Jiangsu province. Manufacturers continued to maintain their production at a low operating rate, and the downstream demand increasingly shrank, and it is estimated that the price will feature turbulently in a short term.

Potash fertilizers    

During the first half of June, the domestic price of potash fertilizers kept falling. The market in Qinghai province was under depression, and the potassium chloride (with a concentration of 57%) produced by some small enterprises was priced at about RMB2 400-2 700/t. Most of the potassium sulfate enterprises were still out of production, with main ex-factory price being about RMB3 500-3 700/t. In the third week, there was no sign of rebound in the market for potassium sulfate, but with a stronger wait-and-see attitude. Most of the potassium sulfate enterprises have been selling inventories till the end of June.
   There is no sign of improvement in potash fertilizers market yet, but maybe a favorable turn will come in August. However, the markup of such a rising market will still be determined by the market itself.

Sulfur    

During the first half of June, the downstream products of sulfur, such as sulfuric acid, phosphate fertilizer, etc. was traded at low price, which did not generate favorable factors to sulfur sellers, thus sulfur price continued to fall. The bulk transaction price in port trade was at RMB550-570/t, while in domestic market was at RMB600-650/t.
   In the second half of June, the quotation of Liaohe Petrochemical Company in the northeastern China dropped to RMB600/t, and the quotations of other manufacturers kept balance with prior period. The companies in northern China tried to lift offer price. The quotation for Sinopec Tianjin Petrochemical Company was at RMB670/t. By the end of June, the key downstream market for sulfur experienced no favorable turn, and therefore in a short period, the prospects for sulfur market will still keep bleak.
   There is a possibility that the price of sulfur will continuously drop down, but it is sure that the drop will be milder than before.