Yesterday it was learned from the industry that CNPC, China Shipping, Hubei Yihua, Shanxi Jinmei Coal Group, and Shandong Luxi Group, the top five nitrogen fertilizer group sales leaders recently held a symposium at China National Petroleum Corporation to introduce the new nitrogen tariff policy on nitrogen fertilizer production and market operations. The impact of the nitrogen fertilizer supply situation during the spring plowing next year will be discussed.
According to one participant, most major nitrogen fertilisers at the meeting believed that after the country raised its export tariffs on fertilizers, it suppressed the export of urea, but it also objectively hit market confidence, causing stagnant trading in the urea market and the rapid decline in prices. The loss of related companies has increased. At present, many companies are unable to resume production. This year's urea production is severe and the situation is still expanding. Failure to take effective measures will definitely lead to a significant reduction in the supply of urea.
According to statistics from the China Nitrogen Fertilizer Industry Association, urea output was 47.52 million tons from January to November this year, a year-on-year decrease of 6.4%. In December, since the country raised its tariff on urea, the rapid decline in market prices has led to a sudden halt in the recovery of urea production. According to the survey, there are currently nearly 60 companies that have stopped production. The national daily output of urea is only 150,000 tons. The operating rate of the whole industry is only 73.8%. If the current operating rate cannot be effectively increased, the supply of urea will be tight during the spring plowing next year.
“At present, nitrogen fertilizer production enterprises have been caught in a dilemma: On the one hand, urea exports are limited, leading to rapid decline in market prices; on the other hand, nitrogen fertilizer production costs remain high.†Representatives said.
Since May of this year, the price of natural gas has generally risen. Gas-to-head urea production enterprises have increased their tons of urea costs by 240-280 yuan.
The days of coal-headed fertilizer companies are not much better. According to a survey conducted by the association last month, the average price of anthracite used by nitrogenous fertilizer companies has reached 1,430 yuan/ton, up 50% year-on-year. Among them, the price of smoke-free lump coal from enterprises near Shanxi Jincheng rose from 1200 yuan/ton in early October to 1,600 yuan/ton, a rise of 33.3%, and a year-on-year increase of 86%. In Shandong, Henan, Jiangsu, and Anhui, due to a long distance, coal prices are higher.
With the rapid decline in market prices and high costs, companies generally suffer serious losses, which dampen the enthusiasm of production companies to resume production. The reporter learned that at present, some companies reduce losses by reducing the urea load, and some companies that have previously parked have delayed or even cancelled the drive plan. According to the current operating rate, the country will reduce urea production by more than 20,000 tons per day. If this situation is not reversed as soon as possible, it will inevitably affect the nitrogen fertilizer supply in the spring of next year.
In view of the current situation, the participants agreed that the state should introduce measures as soon as possible to boost market confidence, encourage circulation enterprises to actively save reserves, and ensure normal production of enterprises, so as to ensure sufficient supply of fertilizer and market stability for spring plowing next year. Specific proposals include: strengthening the supervision of light storage, promoting early start of light storage, rationalizing the market price of fertilizer, and ensuring the enthusiasm of nitrogen fertilizer production.
According to one participant, most major nitrogen fertilisers at the meeting believed that after the country raised its export tariffs on fertilizers, it suppressed the export of urea, but it also objectively hit market confidence, causing stagnant trading in the urea market and the rapid decline in prices. The loss of related companies has increased. At present, many companies are unable to resume production. This year's urea production is severe and the situation is still expanding. Failure to take effective measures will definitely lead to a significant reduction in the supply of urea.
According to statistics from the China Nitrogen Fertilizer Industry Association, urea output was 47.52 million tons from January to November this year, a year-on-year decrease of 6.4%. In December, since the country raised its tariff on urea, the rapid decline in market prices has led to a sudden halt in the recovery of urea production. According to the survey, there are currently nearly 60 companies that have stopped production. The national daily output of urea is only 150,000 tons. The operating rate of the whole industry is only 73.8%. If the current operating rate cannot be effectively increased, the supply of urea will be tight during the spring plowing next year.
“At present, nitrogen fertilizer production enterprises have been caught in a dilemma: On the one hand, urea exports are limited, leading to rapid decline in market prices; on the other hand, nitrogen fertilizer production costs remain high.†Representatives said.
Since May of this year, the price of natural gas has generally risen. Gas-to-head urea production enterprises have increased their tons of urea costs by 240-280 yuan.
The days of coal-headed fertilizer companies are not much better. According to a survey conducted by the association last month, the average price of anthracite used by nitrogenous fertilizer companies has reached 1,430 yuan/ton, up 50% year-on-year. Among them, the price of smoke-free lump coal from enterprises near Shanxi Jincheng rose from 1200 yuan/ton in early October to 1,600 yuan/ton, a rise of 33.3%, and a year-on-year increase of 86%. In Shandong, Henan, Jiangsu, and Anhui, due to a long distance, coal prices are higher.
With the rapid decline in market prices and high costs, companies generally suffer serious losses, which dampen the enthusiasm of production companies to resume production. The reporter learned that at present, some companies reduce losses by reducing the urea load, and some companies that have previously parked have delayed or even cancelled the drive plan. According to the current operating rate, the country will reduce urea production by more than 20,000 tons per day. If this situation is not reversed as soon as possible, it will inevitably affect the nitrogen fertilizer supply in the spring of next year.
In view of the current situation, the participants agreed that the state should introduce measures as soon as possible to boost market confidence, encourage circulation enterprises to actively save reserves, and ensure normal production of enterprises, so as to ensure sufficient supply of fertilizer and market stability for spring plowing next year. Specific proposals include: strengthening the supervision of light storage, promoting early start of light storage, rationalizing the market price of fertilizer, and ensuring the enthusiasm of nitrogen fertilizer production.
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