Price Trend

According to the price monitoring of business associations, the market offer price of 50% granular potassium sulphate in the northern region is about 2950-3050 yuan/ton. There is no obvious pressure on the stock of potassium sulphate Market for the time being. Price stabilization is the main factor, and the market demand has not obviously recovered in the near future.

II. Market Analysis

At present, the start-up rate of Mannheim potassium sulfate is slightly lower, and there are few new orders. Mannheim 50% powder ex-factory price is more than 2750-2850 yuan/ton, 52% powder ex-factory price is 2900-3000 yuan/ton, particle and 52% powder transaction situation is obviously better than 50% powder source, downstream water-soluble fertilizer factory has a certain raw material procurement. Resource-based potassium sulfate prices are temporarily stable, Qinghai water salt 50% powder arrival quotation is still 2550-2580 yuan/ton, the national investment of potassium 52% powder price is more than 2800-2850 yuan/ton, different regional prices slightly different, but more according to the actual order pricing.

III. Industrial Chain

Upstream: Domestic potassium is still in good condition in the near future. The pre-factory orders are abundant. In succession of shipments, the official quotation of salt lake is higher. The pre-sale price of distributors in different regions is lower, but it has been raised to the normal sales level. In terms of import potassium, there is a slight upward trend in port stability. The port stock is about 2.1 million tons. Referring to the mainstream quotation, 62% of the port price of Russian-white potassium is about 2350-2400 yuan/ton, Russian-red potassium is 2300-2350 yuan/ton, and granular potassium is about 2420-2450/ton. The actual transaction orders are mainly negotiated, with a certain preference.

Downstream: The overall raw material cost of compound fertilizer has not changed much, the demand has entered the peak season, the local goods are concentrated and tense, and the quotation of compound fertilizer will maintain a relatively stable state in the short term.

IV. Future Market Forecast

Potassium sulfate analysts at the business association believe that demand for potassium sulfate is not strong and cost support is weakening, and the trend is expected to stabilize mainly in the short term.

At present, due to the weakness of the fundamentals, methanol futures price lacks endogenous upward mobility, but the price gap and price-to-price relationship with related varieties have digested the shortfall, and the space below methanol price is limited. We believe that the methanol market will be extremely prosperous in the next three months. Under the background of macro overall improvement, methanol should be added along the low light warehouse along the oscillation interval, and the risk ratio of long-term holdings is higher.

Weak supply and demand side drags up the period price

In the first quarter, the methanol futures price was weakly consolidated in the range of 2450-2600 yuan/ton, with occasional breakthroughs upward or downward, but the range was small and the duration was short, which indicated that a multi-empty phase equilibrium had been formed in the current price range.

From the static environment, the supply and demand side of methanol is weak. On the eve of the Qingming Festival, the methanol inventory of East China Port increased by 232,500 tons to 654,000 tons in the year. Although it fell back to 606,500 tons after the Qingming Festival, it is still the highest level in the same period in the past eight years, which is 244,200 tons higher than the average level in the same period in the past seven years. On the supply side, according to statistics from Jin Lianchuang, as of April 11, the start-up rate of domestic methanol plants was 63.62%, which was 8.76% lower than the peak level on March 18, and the spring inspection intensity was similar to that of previous years, but the start-up rate was still the highest level in the same period in the past six years, which was 6.79% higher than the average level in the same period in the past five years. Therefore, high inventory and high start-up are the main reasons for dragging methanol forward price.

Industrial Chain Price Spread Reflects the Disadvantaged Reality

Since the large-scale production of MTP plant in China in 2016, PP, as the leading product of downstream methanol consumption, has a great influence on the trend of methanol futures price. According to the theoretical unit consumption of MTP unit, when we observe the change of the price difference between PP and methanol futures, we use the futures price of PP minus 3 times the futures price of methanol as the calculation formula.

This year, the price gap between PP and methanol futures index has been running at a high level for a long time. As of April 15, the price gap between PP and methanol futures index was 1304, up 472 from the beginning of March, which is in the top range since 2016. From the historical data, the price gap rarely breaks through this high, only in 2016 it breaks through this resistance level significantly and continues to rise, but at that time it was the oscillating consolidation of PP strong rise and methanol superimposed. Therefore, the high price difference will form a strong underpinning effect on methanol futures price.

In addition, the price trends of PTA/methanol, power coal/methanol and WTI/methanol are at the top of the range since 2016, supporting methanol from the overall chemical plate, cost surface and substitution effect.

Therefore, the current futures price of methanol is at a historic low compared with the varieties with high correlation. The high price difference or high specific price fully reflects the weakness of methanol fundamentals at this stage. Unless there is systemic risk, the space below methanol is very limited.

The domestic economy is showing signs of improvement.

According to data released by the National Bureau of Statistics, PMI data of manufacturing industry rose 1.3% to 50.5% in March, returning to the line of prosperity and decline, the biggest monthly rise since 2012. In March, the production index, the new order index, the purchase price index of raw materials and the ex-factory price index all rose to their highs in the past six months. In addition, in dollar terms, China’s exports in March increased 14.2% year-on-year, while expected to increase by 6.5%. From the capital level analysis, the growth of social finance rebounded to 2.86 trillion yuan in March, about four times the previous value; the new loan of RMB 1.69 trillion yuan also rebounded sharply from the previous value. In March, M2 money supply increased 8.6% year on year, reaching a 13-month high; M1 money supply increased 4.6% year on year, reaching an 8-month high. At present, domestic demand, foreign demand and capital show that the domestic economy is in good shape.

On the contrary, the possible changes in the future, whether the formal commissioning of new olefin plants or the possible instability of supply in domestic and foreign production plants, all present a picture of whether the price of methanol is extremely high or not. From the point of view of the trend of the price difference between the port inventory and the domestic cross-regional price in the past five years, the change of the port inventory leads the trend of the domestic cross-regional price difference for five months. If this rule continues, the port market will be significantly stronger than the mainland market in the coming May-July, thus supporting the futures price.

In short, in the context of macro overall improvement, the performance-price ratio of long-methanol futures in the next three months is much higher than short-selling.

Up to now, the overall progress of spring fertilizer market has been sweeping from north to south. Generally speaking, there is no big gap between the demand of fertilizer in the lower reaches of most areas in this spring and the quantity level in previous years. The market peak season lags behind and is short, but the price is relatively high. Nowadays, the fertilizer market has officially begun in summer. Although enterprises have already carried out pre-collection activities, the enthusiasm of downstream payment is not high, and cautious wait-and-see is still dominant.

Apart from the fact that fertilizer prices are too high and crop prices are too low in previous years, another major reason for the slow downstream pickup is the frequent fluctuation of urea prices. Following the weakening of prices, urea prices in Shandong and Lianghe have warmed up slightly since last weekend, but in the absence of a significant positive domestic and international market, whether this round of small price increases can be sustained or not Despite the fact that it is unknown, the impact on finished fertilizers such as water-soluble fertilizers has been apparent.

Firstly, preferential policies should be adjusted. In order to seize the market share, most water-soluble fertilizer enterprises have a certain degree of preferential trade in products, generally more than 100 yuan/ton, or contain the corresponding rebate policy. The change of raw material market also makes the cost of water-soluble fertilizer fluctuate up and down. The enterprise will naturally adjust the sales plan. The main price of water-soluble fertilizer itself is relatively high. If the quotation of the factory is adjusted slightly, the effect is not very obvious. Once the big move is taken, it will certainly affect the enthusiasm of downstream delivery. Therefore, the change of preferential policy can not only meet the synthetic cost. The ups and downs, and will not restrain the release of downstream demand too much, can be regarded as “one kill two birds with one stone”.

Secondly, the trading climate has weakened. Unlike usual, after the end of winter water-soluble fertilizer peak season, the demand of spring, summer and autumn has improved, successfully occupying part of the traditional fertilizer market. Since the fluctuation of urea market, the atmosphere of local water-soluble fertilizer trading has weakened. The first reason is that downstream enterprises are worried about adjusting prices and waiting patiently for the future market to be clear. The second reason is that the period of concentration of demand in spring is coming to an end, and the demand in summer is still sometime too early to reserve goods. It is likely to miss the profit opportunities, even form the inversion of prices. Water-soluble fertilizer market or with the overall fertilizer market into a short period of rest, in preparation for summer sales.

Finally, the start-up rate decreased slightly. Not long ago, the explosion of Yancheng Chemical Plant in Jiangsu did give people a warning. Many chemical parks have carried out a major inspection of production safety. Fertilizer production enterprises are inevitably affected, and the production situation has been relatively depressed. Urea market changes rapidly, increasing downstream sentiment, demand is restrained, water-soluble fertilizer enterprises orders become worse, due to inventory pressure, some enterprises can only take the initiative to reduce the start-up rate, try to maintain the balance of production and marketing; in addition, as mentioned above, the spring demand season is coming to an end, the gradual reduction of orders is also an important reason for reducing the start-up rate, therefore, water in the short term. Fertilizer enterprises will control production according to the order situation.

In summary, urea has been rising and falling all the way, bringing suspense to the development of fertilizer market at all stages, but it has to be said that good urea support for finished fertilizer is very strong. Once the price of urea does not fall significantly during the summer fertilizer period, the market of finished fertilizer will also be stable.

The U.S. Treasury Department added a new round of sanctions on Venezuela on December 12, blacklisting four foreign shipping companies and nine oil tankers that transported crude oil to Venezuela, further exerting pressure on the Venezuelan government.

US Treasury Secretary Steven Mnuchin announced sanctions on 3 Liberian shipping companies, 1 Italian company and 9 oil tankers under these companies on December 12, designating them as exporting Venezuelan crude oil to Cuba.

The United States will freeze the assets of these four companies in the United States and prohibit American citizens from doing business with them.

In a statement, the U.S. Treasury Department said that crude oil export revenue remains “the lifeline of the Nicolas Maduro regime”, and the United States will continue to sanction enterprises that help Venezuelan government export crude oil.

The last round of U.S. sanctions mainly targeted Venezuelan oil companies, 34 oil tankers owned by the state-owned enterprise and two foreign companies that transported Venezuelan crude oil to Cuba.

At the end of January, the United States announced sanctions against Venezuelan Petroleum Corporation, freezing its assets in the United States and withholding the proceeds of its crude oil exports to the United States.

According to the United States, Cuba is the main importer of Venezuelan crude oil; in exchange, Cuba sent political advisers, intelligence personnel, military officers and medical experts to Venezuela.

Cuba has previously stated that no matter how the United States sanctions Venezuela, Cuba will not abandon its allies.

People’s livelihood-stricken Associated Press reported that the United States recently imposed several rounds of sanctions on Venezuela’s oil and financial fields, involving more than 150 people and entities, and revoked 718 “trusted” visas to the United States from Venezuelan government leaders.

US Secretary of State Mike Pompeo, who is visiting four Latin American countries, said Tuesday that the US side will continue to pressure the Maduro government with sanctions and diplomacy and “will not withdraw from this fight”.

Critics say the Venezuelan people suffer from inflation and shortage of goods, and the US sanctions will only aggravate their suffering and will not help resolve the crisis.

Russian Foreign Ministry spokesman Maria Zaharova said on November 11 that the illegal unilateral sanctions imposed by the United States have caused Venezuela more than $110 billion in losses. Instead of forcing a limited amount of humanitarian assistance to Venezuela, it is better to lift the sanctions.

Juan Guaido, Venezuela’s opposition leader and parliamentary chairman, announced on January 23 that he was acting as “interim president” and was recognized by the United States and other European and Latin American countries. The United States has been stepping up sanctions against Venezuela in recent years in an attempt to force Maduro to step down.

The Venezuelan government has not responded to the latest U.S. sanctions for the time being. It had previously condemned the sanctions imposed by the United States as “unilateral, arbitrary, coercive and illegal”, saying that Venezuela continued to firmly safeguard its political, economic and cultural independence and that no action by the United States would yield Venezuelan people.

On April 14, the ammonium nitrate commodity index was 107.02, which was the same as yesterday. It was 9.63% lower than the cyclical peak of 118.42 points (2019-01-15), and 38.32% higher than the lowest point of 77.37 on October 31, 2016. (Note: Period refers to 2013-02-01 to date)

Recently, the price trend of domestic ammonium nitrate Market has maintained a low level. Affected by environmental protection control, domestic ammonium nitrate plants shut down more, and domestic ammonium nitrate plants started less. However, with the warming of the weather recently, the influence of northern air limitation disappeared. In addition, due to the complete shutdown of domestic downstream civil explosion industry, domestic ammonium nitrate manufacturers have more stockpiles and the price trend in the field has declined. As of the 15th day, the domestic ammonium nitrate market price talks in 1900-2100 yuan/ton, affected by environmental protection, so now many manufacturers in many areas have been forced to limit production or stop production and maintenance to accept environmental protection inspection, the price trend of ammonium nitrate in the field is weak.

Recently, the domestic nitric acid price trend is temporarily stable, up to 15 days, the market price is 1560 yuan/ton. The stable trend of nitric acid price has little effect on the ammonium nitrate market, and the price trend of ammonium nitrate has slightly declined. The price trend of upstream raw material liquid ammonia is temporarily stable, up to 15 days, the market price of liquid ammonia is 3416 yuan/ton. The temporary stable trend of upstream raw material price brings certain support to the ammonium nitrate market. Market price trend is stable for the time being. At the end of the peak season of the downstream civil explosion industry recently, the demand for ammonium nitrate has weakened and the stocks of ammonium nitrate manufacturers have increased, but the liquid ammonia market is on the rise again. The ammonium nitrate Market has slightly declined due to the bad market. Ammonium nitrate analysts believe that the recent upstream raw material market price shocks, but the downstream demand is not good, ammonium nitrate market prices are expected to maintain shocks in the later period.