Domestic Fertilizer Industry Development is Constrained by Three Factors

According to customs statistics, from January to May 2010, Guangdong Province imported a total of 189,000 tons of mineral fertilizers and chemical fertilizers (hereinafter referred to as “fertilizers”), a sharp drop of 35% from the same period of last year; the value was US$66.69 million, a decrease of 54.8%. The average import price was US$352.6 per ton, down 30.5%. The main features of imports are:

First, the import volume rebounded in the month of May, and the average import price continued to fall. Monthly imports of chemical fertilizers in Guangdong Province reached the lowest point of 0.6 million tons in April, and rebounded to 33,000 tons in May, a dramatic increase of 5.1 times year-on-year and a 4.5% increase from the previous month. Since the beginning of this year, the average monthly import price of chemical fertilizers in Guangdong Province has remained low. The operation amounted to US$350.3 per ton in May, down 34.8% year-on-year (below).

2. Imports and exports of bonded warehouses accounted for more than 90% of imports, and imports from general trade methods dropped significantly. From January to May, Guangdong Province imported 18.8 million tons of chemical fertilizers by way of import and export of bonded warehouses, a rapid drop of 34%, accounting for 99.5% of the total import of fertilizers in Guangdong Province during the same period; during the same period, it imported 1394 tons by general trade. A sharp drop of 77.4%.

3. The rapid increase in imports from Russia, the surge in imports from Chile and the United States, and Jordan as a new source of imports. From January to May, Guangdong Province imported 64 thousand tons of chemical fertilizers from Russia, a rapid increase of 89%. It imported 45,000 tons and 43,000 tons respectively from the United States and Chile. It surged 1 and 8.5 times. It imported 30,000 tons from Jordan. Last year There was no import record in the same period. The imports from the above four areas accounted for 96.3% of the total imports of fertilizers in Guangdong during the same period. In addition, imports from Norway fell from 122,000 tons in the same period last year to 0.4 million tons, a drop of 96.4%.

4. Foreign-invested enterprises dominate imports, and imports from private companies have dropped significantly. From January to May, foreign-invested enterprises in Guangdong Province imported 188,000 tons of chemical fertilizers, a rapid drop of 35%, accounting for 99.5%; private enterprises imported 1,125 tons, a decrease of 25%.

Since the beginning of this year, the main reasons for the fall in the volume of fertilizer imports in Guangdong Province are:

First, the weather causes the delay of domestic fertilizer peaks. The long-term, large-area and ultra-low-temperature ice and snow conditions that have occurred in China during winter and spring have seriously affected the normal sowing of spring crops and delayed the release of market demand. The severe drought conditions in some southern parts of China have led to a reduction in fertilization in the field and a corresponding demand for fertilizer imports. Decline.

Second, the oversupply in the international market led to a drop in prices. Resource Advantages The expansion of national fertilizer production capacity continues unabated. For example, large-scale fertilizer installations are being built in countries in the Middle East, Africa, Eastern Europe and South America. The successive production of these new installations will aggravate the international fertilizer market's oversupply, and the international market price will decline accordingly.

At present, the domestic fertilizer industry has several issues that warrant attention:

The first is that rising raw material prices raise the production cost of enterprises and reduce the profitability of enterprises. Since 0:00 on June 1, China's natural gas ex-factory price has increased from 925 yuan per cubic meter to 1,155 yuan, an increase of 0.23 yuan per cubic meter, a price increase of 24.9%, and a tonnage price per ton** at the beginning of the year. Last year's average price was nearly $100, which has pushed up the production costs of phosphate compound fertilizers. Facing the already-prepared fertilizer and fertilizer peaks, the domestic fertilizer market is still in a sluggish state, but the prices of raw materials such as natural gas and natural gas have all increased, driving up the company’s production costs.

Second, poor market demand led to the lack of operating rate of enterprises and increased the situation of overcapacity. The oversupply situation in the fertilizer market and severe droughts in the south and continuous cold weather in the north led to a decline in market demand. As a result, the operating rate of enterprises was insufficient and the loss increased. According to statistics from the Nitrogen Fertilizer Industry Association, there are currently more than 30 urea companies that have stopped and overhauled, and the company's operating rate is only 76%. Four sets of large-scale urea plants in Southwest China (with an annual urea production capacity of approximately 3 million tons) have also been parked for some reason. In 2009, China's new fertilizer production capacity was approximately 4.3 million tons, with a total production capacity of 63 million tons and a surplus production capacity of 10 million tons. This year, the domestic fertilizer market is sluggish and sales are slow, which has aggravated the imbalance situation of oversupply.

Third, under the low-carbon concept, the reduction pressure of fertilizer production enterprises will increase. Relevant data show that China's nitrogen fertilizer utilization rate in the current season is only 30% to 35%, phosphate fertilizer is about 15 to 20%, potassium fertilizer is about 35% to 40%, the loss of unused fertilizer will cause serious pollution to the natural environment; At the same time, carbon dioxide emitted during the production and application of nitrogen fertilizer accounts for about 8% of the country's total annual emissions. At present, about 80% of raw materials for nitrogen fertilizer production in China are coal. With the completion of the reform of the natural gas pricing mechanism, this proportion may increase. Under the background of the prevailing low-carbon economy concept, the development of fertilizer production enterprises will face even greater challenges. .

Suggestions for this: First, rationally formulate new natural gas pricing mechanisms, fully consider the impact of rising gas prices on the fertilizer industry, balance upstream production enterprises and downstream agricultural interests, and second, eliminate outdated industry productivity, accelerate resource integration, and optimize industrial structure. Effectively solve the outstanding issues such as structural overcapacity; Third, provide policies and financial support for the technological transformation of chemical fertilizer companies, vigorously improve the efficiency of fertilizer utilization, and eliminate obsolete production capacity with high consumption and poor efficiency.