The recent domestic shipment of diammonium phosphate has largely been completed. With the onset of spring plowing in the northeast and the gradual opening of fertilizer markets in May, the focus is now shifting towards the export season. Export companies have begun stockpiling goods in Hong Kong, though specific export pricing is still under discussion and no final figures have been set. Despite being a major exporter, China's export outlook this year remains uncertain. Over the past few weeks, we've analyzed downstream demand and price trends. This week, our attention turned to raw materials—examining factors such as supply chain dynamics, regional market behavior, and production costs to better understand how fluctuations in raw material prices impact the overall market. **Rise in the surrounding area** The current **raw material** market appears relatively stable, though regional performance varies. The southern markets in Central, South China, and Southwest regions remain generally stable with a relaxed market atmosphere. This stability is largely due to the concentration of large-scale smelting acid and sulfonic acid producers in these areas. In contrast, the northern market has shown weaker performance. Smelting acid output in western Inner Mongolia has dropped, while the Henan and Hebei markets have continued their downward trend. The Jiangsu market saw a slight rebound due to minor price increases in raw materials, while the Shandong market remains mixed. Many companies in the Jiaodong region are undergoing maintenance, leading to a gradual decline in market prices. The price of **sulfuric acid** has recently increased. Qingdao Port prices have risen from RMB 900 per ton to between RMB 1,050–1,070 per ton, with low-end negotiations hovering around RMB 1,030–1,050 per ton. Although prices are trending upward, traders are not rushing to ship, preferring to wait for stabilization. Downstream manufacturers are also not very active, as prices had been relatively quiet before. The recent uptick does not necessarily indicate a long-term trend, especially with some companies shutting down for maintenance. As a result, inventory demand remains low, and the market is showing tentative signs of growth. However, there are positive developments. After the price increase at Qingdao Port, many traders along the Yangtze River began aggressively purchasing bulk cargo from various ports. Current prices have reached as high as RMB 1,100 per ton, with no reports of price drops and inventory concentrated in key areas. Li Yan, Manager of the Fertilizer Marketing Department at Sinochem Shandong Fertilizer Industry Co., Ltd., noted that although prices have rebounded by 50–100 yuan per ton, the increase has not significantly boosted the market. Many factories are still under maintenance, and the demand for domestic ammonium phosphate has largely declined. For export-oriented companies, current export prices are still being negotiated, with the lowest price yet to be announced. Production companies should closely monitor future export developments, as many negative factors continue to shape the market, and companies remain cautious. **Beware of price speculation** China currently cannot meet its own needs and relies heavily on imports. Importers typically negotiate prices based on monthly or quarterly delivery schedules with domestic traders. For example, Sinochem Group imports approximately 2 million tons annually, maintaining stable partnerships with foreign suppliers to ensure consistent and reliable import flows. However, in port cities like Qingdao, Fangchenggang, and Yantai, there are numerous trading companies. Due to low entry barriers and small trade volumes, these firms mainly play a distribution role. However, they often engage in speculative activities, taking advantage of market volatility by pushing products that experience significant price swings. They tend to encourage price increases when prices rise and drive them down when they fall, failing to provide meaningful market guidance. Therefore, it is recommended that import companies work with larger trading partners to avoid being misled by smaller, speculative players in the current unstable market. The recent price increase may appear beneficial in the short term, but domestic producers remain calm and have not rushed to purchase. With export pricing still under negotiation, export volume remains uncertain, and the purchase of raw materials has been temporarily paused. It’s possible that the price rise is only temporary, and for companies, it’s wise to adopt a wait-and-see approach.

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