[Chemical Knowledge]：What are the factors influencing the price of diammonium phosphate? Detailed analysis, the price trend of diammonium phosphate in 2021

Introduction

Diammonium phosphate (Diammonium Phosphate, DAP) is a high-efficiency phosphate fertilizer commonly used in agriculture, which is widely welcomed because of its high phosphorus content and good fertilizer efficiency. Its price fluctuations not only directly affect farmers' planting costs, but also have an important impact on global food security. Therefore, in-depth analysis of the factors affecting the price of diammonium phosphate is of great significance for understanding the market dynamics and formulating corresponding strategies. This paper will analyze the price influencing factors of diammonium phosphate in detail from the aspects of production cost, supply and demand relationship, international trade, policy environment and market expectation.

production cost

raw material price

The main raw materials of diammonium phosphate include phosphate rock, ammonia and sulfuric acid. Phosphate rock is the main source of phosphorus in DAP, and its price fluctuation has a direct impact on the price of DAP. The price level of phosphate rock is determined by its mining cost and market supply and demand conditions. Ammonia is an essential component in production, mainly prepared by natural gas, so changes in natural gas prices also directly affect the cost of ammonia. Sulfuric acid is a necessary chemical for the processing of phosphate rock into phosphoric acid, and its price fluctuations are also transmitted to the price of the final product.

Production Technology and Efficiency

The improvement of production technology and process can significantly reduce production costs and improve production efficiency. For example, the use of advanced wet-process phosphoric acid process can improve the extraction rate of phosphoric acid, reduce the consumption and waste of raw materials in the production process, thereby reducing the unit cost of DAP. The modernization of production equipment and the increase in the level of automation also help reduce labor costs and equipment maintenance costs.

supply and demand relationship

agricultural demand

Agriculture is the main consumption area of DAP, so changes in agricultural demand directly affect the market price of DAP. Crop planting area, planting structure, fertilizer use habits and agricultural prices and other factors will affect the agricultural demand for diammonium phosphate. For example, higher food prices incentivize farmers to increase acreage, thereby increasing demand for fertilizers and pushing up the price of DAP. On the contrary, if the price of agricultural products is low, farmers reduce the planting area or reduce the use of fertilizer, the demand for DAP will fall, and the price will also fall.

Global Market Supply

The supply of diammonium phosphate is mainly concentrated in a few large producing countries, such as China, the United States, and India. The production capacity and export policies of these countries have an important impact on the supply of the global market. For example, China is the world's largest producer and exporter of diammonium phosphate, and changes in China's production and export policies will significantly affect the balance of supply and demand in the global market, thereby affecting price fluctuations. Force majeure factors such as natural disasters, worker strikes, and equipment failures in producing countries can also cause supply disruptions and affect market prices.

International Trade

Export Tariffs and Subsidies

In order to protect their agriculture, many countries have implemented export tariffs or subsidies for diammonium phosphate. Export tariffs increase the cost of exports and reduce the volume of exports, thus creating a tight supply in the international market and pushing up prices. On the contrary, export subsidies will reduce export prices and increase export volume, which may lead to oversupply in the international market and depress prices. For example, China has repeatedly adjusted the export tariff policy of diammonium phosphate, which directly affects the price fluctuation in the international market.

trade friction

International trade frictions will also affect the price of diammonium phosphate. For example, trade disputes between major producing countries may lead to import tariff increases or import quota restrictions, which in turn affect the supply and demand balance in the global market. Changes in international political and economic relations, such as sanctions, embargoes and other measures, may also have a profound impact on international trade in diammonium phosphate, thereby indirectly affecting prices.

Policy Environment

Environmental Policy

With the enhancement of environmental awareness, the environmental protection requirements of chemical fertilizer production enterprises in various countries are also increasing. Strict environmental policies may increase the operating costs of production enterprises, such as the need to invest in the construction of wastewater treatment facilities and reduce emissions. These additional environmental costs will eventually be reflected in the price of diammonium phosphate. Environmental policies may also limit capacity expansion or lead to the closure of some substandard companies, thereby affecting market supply and pushing up prices.

agricultural subsidy policy

Government subsidies for agriculture also affect the demand for DAP. For example, government subsidies for fertilizer to farmers can reduce farmers' procurement costs and encourage more use of diammonium phosphate, thereby increasing market demand and pushing up prices. On the contrary, if the government reduces or eliminates fertilizer subsidies, farmers' purchase costs will rise, which may reduce the demand for diammonium phosphate and lead to lower prices.

Market Expectations

Price Expectations and Speculation

Market participants' expectations of future prices also affect current market prices. For example, if the market generally expects the price of diammonium phosphate to rise in the future, traders and farmers may stock up ahead of time, increasing current market demand and driving prices up. Conversely, if prices are expected to fall, they may reduce purchases and increase market supply pressures, leading to lower prices. Speculation can also exacerbate price volatility, especially when supply and demand are tight, and speculators' hoarding and speculation can lead to abnormal price volatility.

Seasonal demand

The demand for diammonium phosphate is distinctly seasonal. For example, spring and autumn are the main crop planting seasons, and there is a greater demand for fertilizers, which usually leads to price increases. Conversely, during the slack season in winter and summer, fertilizer demand decreases and prices may fall. Therefore, seasonal demand changes are also one of the important factors affecting the price of diammonium phosphate.

Conclusion

The price of diammonium phosphate is affected by a combination of factors. Factors such as production costs, supply and demand, international trade, policy environment and market expectations work together to determine the market price of diammonium phosphate. Understanding these influencing factors and their interactions will help to better predict market price trends and provide decision-making references for manufacturers, traders and farmers. In the future, with the development of global agriculture, the improvement of environmental protection requirements and the change of international trade pattern, the market of diammonium phosphate will continue to show dynamic changes, which requires continuous attention and in-depth analysis.