"Although the factory price of urea has generally fallen below 2,000 yuan (tonne price), due to the off-season use of fertilizers, dealers are not willing to accept shipments from the winter storage, and the market is light, and there is still a stalemate in which there is no market for prices. It will be difficult for the market to get out of a decent rally during the year-end and even next year's spring ploughing.†Recently, some industry insiders made pessimistic judgments on the fertilizer market.
The domestic production of urea capacity has grown rapidly, and supply exceeds demand, constraining the market to turn for the better.
In 2010, China's urea production capacity reached 66 million tons. In 2011, it added an additional 400 million tons of production capacity including 800,000 tons of Shandong Luxi Chemicals and 400,000 tons of Rising Chemicals, bringing the total production capacity of urea in the country to 70 million tons. Affected by the increase in prices of fertilizers in May-August, the “bull market†stimulated the growth of domestic urea production in the third quarter was exceptionally rapid. Statistics show that from January to September of this year, the cumulative production of urea in the country reached 20.91 million tons, an increase of 11.3% year-on-year.
According to the recent actual investigations, the nationwide use of coal for coal and gas supply is generally better than last year, and the operating rate of the plant is basically maintained at more than 80%. In particular, the gasification and chemical fertilizer enterprises, the amount of gas supply is not only better than the same period in previous years, or even better than 1 to 5 months, promoting the country's urea production continues to maintain rapid growth. It is expected that by the end of December, the urea carried forward to next year will reach 300-3.5 million tons (in kind). With the output of 1500 to 18,500,000 tons from January to April of next year, during the period of spring plowing next year, the total supply of urea in the country will reach 1800 to 22 million tons. According to past experience, the demand for urea for spring plowing will not exceed 15 million tons. If there is no export to digest, at that time domestic urea will have at least 3 million tons surplus, which will surely suppress the price downward or low.
Fertilizer exports were blocked, and the fierce competition in the domestic market was intensifying.
Although at least 3 million tons of surplus urea will need to be exported during the spring plowing next year, according to the urea export tariff policy, tariffs for 110% of the peak season will be implemented from January to June and November to December, which means that the door to urea exports will basically be closed during this period. New tariff policies to limit the export of such small-scale fertilizers are being formulated and may be introduced in the middle or late December. Once the new tariff of fertilizers is introduced, small-scale fertilizers are also limited to the domestic market. The contradiction in the overall oversupply of chemical fertilizers will be more prominent, market competition will be fiercer, and market conditions will be more difficult.
Changes in the international market structure, inhibition of domestic fertilizer market improved.
In the past, although domestic fertilizer prices were difficult to increase due to excess production capacity, due to large international demand and rising prices, domestic fertilizer prices could be effectively supported, demonstrated, and guided. But this situation is quietly changing. On the one hand, the global economic recovery is slow and the problems encountered are much more complicated than expected. In particular, the spread of the sovereign debt crisis in Europe has become wider and wider. The possibility of a second bottoming out of the world economy has increased, and the demand for petroleum, food, fruits and vegetables, forestry cotton, and biomass products will slow down significantly, reducing related areas. Fertilizer demand is expected.
At present, the annual domestic demand for agricultural urea is 38-41 million tons, industrial urea is not more than 7 million tons, and the production capacity is as high as 70 million tons, with a surplus of 1/3; the total production capacity of phosphate fertilizer is 20 million tons (P2O5), and the actual consumption is The amount did not exceed 11.5 million tons, a surplus of 43%; the production capacity of diammonium phosphate was 15 million tons, and the actual annual domestic demand was only 7.5 million tons, which was half of the surplus; the superfluous calcium surplus was 50%. Industry insiders expect that the domestic fertilizer market rebounded hopefully during the spring plowing next year.
The domestic production of urea capacity has grown rapidly, and supply exceeds demand, constraining the market to turn for the better.
In 2010, China's urea production capacity reached 66 million tons. In 2011, it added an additional 400 million tons of production capacity including 800,000 tons of Shandong Luxi Chemicals and 400,000 tons of Rising Chemicals, bringing the total production capacity of urea in the country to 70 million tons. Affected by the increase in prices of fertilizers in May-August, the “bull market†stimulated the growth of domestic urea production in the third quarter was exceptionally rapid. Statistics show that from January to September of this year, the cumulative production of urea in the country reached 20.91 million tons, an increase of 11.3% year-on-year.
According to the recent actual investigations, the nationwide use of coal for coal and gas supply is generally better than last year, and the operating rate of the plant is basically maintained at more than 80%. In particular, the gasification and chemical fertilizer enterprises, the amount of gas supply is not only better than the same period in previous years, or even better than 1 to 5 months, promoting the country's urea production continues to maintain rapid growth. It is expected that by the end of December, the urea carried forward to next year will reach 300-3.5 million tons (in kind). With the output of 1500 to 18,500,000 tons from January to April of next year, during the period of spring plowing next year, the total supply of urea in the country will reach 1800 to 22 million tons. According to past experience, the demand for urea for spring plowing will not exceed 15 million tons. If there is no export to digest, at that time domestic urea will have at least 3 million tons surplus, which will surely suppress the price downward or low.
Fertilizer exports were blocked, and the fierce competition in the domestic market was intensifying.
Although at least 3 million tons of surplus urea will need to be exported during the spring plowing next year, according to the urea export tariff policy, tariffs for 110% of the peak season will be implemented from January to June and November to December, which means that the door to urea exports will basically be closed during this period. New tariff policies to limit the export of such small-scale fertilizers are being formulated and may be introduced in the middle or late December. Once the new tariff of fertilizers is introduced, small-scale fertilizers are also limited to the domestic market. The contradiction in the overall oversupply of chemical fertilizers will be more prominent, market competition will be fiercer, and market conditions will be more difficult.
Changes in the international market structure, inhibition of domestic fertilizer market improved.
In the past, although domestic fertilizer prices were difficult to increase due to excess production capacity, due to large international demand and rising prices, domestic fertilizer prices could be effectively supported, demonstrated, and guided. But this situation is quietly changing. On the one hand, the global economic recovery is slow and the problems encountered are much more complicated than expected. In particular, the spread of the sovereign debt crisis in Europe has become wider and wider. The possibility of a second bottoming out of the world economy has increased, and the demand for petroleum, food, fruits and vegetables, forestry cotton, and biomass products will slow down significantly, reducing related areas. Fertilizer demand is expected.
At present, the annual domestic demand for agricultural urea is 38-41 million tons, industrial urea is not more than 7 million tons, and the production capacity is as high as 70 million tons, with a surplus of 1/3; the total production capacity of phosphate fertilizer is 20 million tons (P2O5), and the actual consumption is The amount did not exceed 11.5 million tons, a surplus of 43%; the production capacity of diammonium phosphate was 15 million tons, and the actual annual domestic demand was only 7.5 million tons, which was half of the surplus; the superfluous calcium surplus was 50%. Industry insiders expect that the domestic fertilizer market rebounded hopefully during the spring plowing next year.
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