Scarce ammonia curtails China DAP production

02 January 2008 16:20  [Source: ICIS news]

LONDON (ICIS news)--Chinese phosphate fertilizer producers have curtailed production, citing a lack of ammonia feedstocks, a manufacturer said on Wednesday.

 

A source at major producer Wengfu said it had reined in output of diammonium phosphate (DAP) fertilizer by 20-30% for January, due to a lack of ammonia. Wengfu has the capacity to produce 1.2m tonnes/year of DAP.

 

Another Chinese producer, Yuntianhua was also reported to have curtailed production due to ammonia supply problems although this could not be confirmed with the producer.

 

Ammonia pricing has been tight in recent weeks and latest reports of production issues at key sites in Malaysia were thought to have exacerbated the problem.

 

The Chinese domestic market is facing a shortfall of DAP for the forthcoming spring season, due to high levels of exports during 2007 to take advantage of soaring international DAP prices, as well as production issues as a result of sulphur and ammonia feedstock problems.

 

The Chinese government has already announced a DAP export duty of 20% for the first quarter of 2008, rising to 30% in quarters two and three to discourage exports.

 

It has also abolished the 13% value-added tax (VAT) applicable to imports of DAP sold in the domestic market in an attempt to encourage imports.

 

Traders thought that greater imports of DAP were unlikely given the tight global supply position. 

By: Mike Nash
+44 20 8652 3214

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