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Compound fertilizer companies are tired by upstream exports

The operators are raising concerns over the sharp rise in the price of monoammonium phosphate. Recently, a report published by China Chemical Industry News highlighted that rising costs of sulfur and other raw materials, along with increasing international fertilizer prices, have driven domestic monoammonium phosphate prices to unprecedented levels. As a result, the product has been increasingly directed toward overseas markets, leaving very little available for domestic use. This scarcity has significantly increased the value of monoammonium phosphate, putting immense pressure on downstream compound fertilizer manufacturers. As one of the main raw materials used in compound fertilizer production, the soaring price of monoammonium phosphate has led to a sudden spike in production costs for these companies. Many have found themselves struggling to keep up, with some even forced to halt operations. Reports from industry insiders reveal that the price of monoammonium phosphate has risen from 1,900 yuan per ton in June to as high as 2,400 yuan per ton by September. In some cases, prices have gone even higher, reaching 2,650 yuan per ton for certain grades. Despite these high costs, many compound fertilizer companies still find it difficult to secure supplies. With export volumes surging, domestic availability has dropped dramatically. This shortage has caused major disruptions, especially during the critical autumn season when farmers need fertilizers. Small and medium-sized companies are particularly affected, with some having to shut down entirely or reduce output significantly. Hebei Hengshui Tianfeng Fertilizer Co., Ltd., a small company established just five years ago, is one such example. Its general manager, Shi Guozheng, described the situation as “too high” and noted that the price of monoammonium phosphate has been increasing by around 200 yuan per ton every month since June. He explained that the reason was the massive export demand. In July alone, exports of monoammonium and diammonium phosphate reached 420,000 tons, and from June to August, this accounted for nearly half of the total domestic production. As a result, the company is facing severe shortages, with only a few dozen tons of monoammonium phosphate left in stock. In response, the factory had to cut back from two shifts to one, reducing output by half. The company is also considering using diammonium phosphate instead of monoammonium phosphate, which is less efficient and more costly. Similar situations are being reported across the region, with multiple fertilizer plants unable to operate at full capacity due to the same supply issues. Even larger companies are not immune. A director from a Shandong-based fertilizer plant stated that the current high prices have forced them to shut down for over 40 days. Despite the peak season for crop fertilization, they can only produce at a minimal level. The cost per ton of compound fertilizer has increased by 300 yuan, forcing them to raise prices. However, farmers are unwilling to pay the new prices, creating a difficult situation for the entire industry. Henan Lianxinxin’s procurement staff confirmed that they can only obtain monoammonium phosphate at 2,400 yuan per ton, but even this is hard to secure. Although they managed to stockpile over 10,000 tons in advance, their production remains limited. They have strong partnerships with major producers like Yuntianhua, but supply is still restricted, with each company receiving only a few thousand tons at a time. Online reports show that some monoammonium phosphate producers are now exclusively focusing on exports, while others are refusing domestic orders until October. Daily price quotes are consistently rising, reflecting the growing imbalance between supply and demand. Industry experts warn that the surge in exports and high prices could lead to changes in fertilizer formulations. Some companies may reduce phosphorus content to cut costs, potentially affecting the quality of available products. Farmers may also be forced to switch to cheaper alternatives like ammonium bicarbonate or calcium magnesium phosphate, altering traditional farming practices. Overall, the situation highlights the deepening challenges in the fertilizer sector, with both suppliers and end-users feeling the strain of rising prices and supply shortages.

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