Summary: Domestic supply of phosphate fertilisers during the spring ploughing period in 2021 is estimated to be 6.97 million tonnes (P₂O₅), up by 2.1% YoY; operating rates of MAP and DAP went up compared with the same period last year.

Domestic and global fertiliser demand is strong and social inventories are at a low level as the COVID-19 pandemic drives up food prices worldwide. China's phosphate and compound fertiliser industry managed to organise production and delivery actively to ensure stable domestic supply by overcoming difficulties like tension between supply and demand, rising prices of raw materials, growing logistics costs, and pandemic prevention and control. According to statistics of China Phosphate Fertiliser Industry Association (CPFIA), the total amount of fertiliser preparation in winter and phosphate fertiliser supply for spring ploughing from Oct. 2020 to March 2021 reached 6.07 million tonnes (P₂O₅); by late April 2021, the total phosphate fertiliser supply during the period of spring ploughing is predicted to hit 6.97 million tonnes (P₂O₅), inching up by 2.1% YoY and down by 2.7 YoY over that in 2019.In the meantime, operating rates of monoammonium phosphate (MAP) and diammonium phosphate (DAP), major types of phosphate fertilisers, ascended significantly over those last year for the following three reasons:

• The production capacity of phosphate fertilisers has been optimised during the 13^th five-year plan;
• Domestic planting area increased and demand improved;
• Global demand was strong after the outbreak of COVID-19 and MAP and DAP prices continued to mount, which boosted China's exports.

Particularly after the Spring Festival (mid-Feb. 2021), MAP and DAP prices kept climbing and then maintained stability at a high level because of three factors:

• Since heating systems began to work in winter, prices of coal swelled; peak-shaving of natural gas triggered tight supply and rising prices, which resulted into growing prices of synthetic ammonia (NH₃), with a YoY increase of 37%;
• Prices of commodities picked up after the Chinese New Year due to over-issue of currency of Europe and America, drop in global crude production and increase in ocean freight. In April, sulphur prices CIF China surged by around 200% YoY to USD199/t;
• Prices of domestic phosphorus ore were also affected by the market, rising by USD6.16/t–USD9.25/t (RMB40/t–RMB60/t).

Overall, production costs of MAP and DAP went up by USD86.29/t (RMB560/t) and USD100.16/t (RMB650/t) respectively given the ascending prices of NH₃, sulphur and phosphorus ore.