Differing views on the trend of the fertilizer market in the fertilizer industry

Spring plowing started from the south to the north, and the domestic fertilizer market increased in volume. However, the reporter found that different companies have different opinions about the late trend of the fertilizer market. Since June 1st, phosphate fertilizer and dual fertilizer will usher in a four-month off-season export tariff period. The instability in the Middle East has already and will continue to push up international oil, natural gas and sulfur prices, which in turn will push up international fertilizer prices. Will benefit domestic fertilizer exports. In this case, when the domestic spring tillage fertilizer is over, many companies will target the international market and actively transfer chemical fertilizers to the ports to prepare for exports after June to ease the domestic oversupply pressure. From July to October, domestic urea and phosphorus compound fertilizers will usher in the demand season, which will make it difficult for fertilizer prices to decline.

Li Changxia, the marketing manager of Shandong Hongri Arkang Chemical Co., Ltd., is the representative of “optimists”. He said that due to the high prices of chemical fertilizers in winter last year, dealers dared not rush to store fertilizers, resulting in the basic balance of supply and demand in the chemical fertilizer market in the spring, and the nitrogen and phosphate fertilizers in the Northeast market had a certain gap, which drove the fertility market in the country to flourish. According to past experience, the fertilizer season in the northeast region will end in early April. Therefore, this wave of rally will last at least until early April.

At present, the ex-factory price of Hebei urea is 2,200 yuan (t price, the same below), the beginning of the preparation of fertilizer in the Northeast, urea market price has risen to 2300 ~ 2400 yuan, there is still a possibility of further rise in the latter part, will drive the national fertilizer prices higher. Although after mid-April, the country will enter the off season with fertilizer. However, on the one hand, domestic coal, electricity, transportation and labor costs have continued to rise since last year, which has drastically increased the production costs of chemical fertilizers, and it has been difficult to support the price of chemical fertilizers. On the other hand, many small and medium-sized nitrogen fertilizer companies have been unable to organize production due to continuous losses. At present, more than half of the small nitriding enterprises in Hebei have stopped production. This is generally the case across the country, which will reduce effective domestic fertilizer production capacity and production.

In recent years, fierce competition has forced chemical fertilizer companies to continue to develop non-agricultural fertilizers and continuously increase demand for non-agricultural fertilizers. After the second quarter, which is the peak season for non-agricultural fertilizer traditional consumption, the above factors will support the high price of fertilizers to run or continue to rise.

However, some market players, including Xue Sansheng, deputy chief economist of Suihua Group, and Guo Quanpu, general manager of Henan Zhongyuan Dahua Group Sales Company, are not optimistic about the fertilizer market.

Xue Sanxing believes that due to better fertilizer market for spring plowing this year, many companies are stimulated to start production at full capacity, which leaves hidden dangers for the continued fatality of the fertilizer market. With the release of new production capacity, the contradiction in domestic oversupply of fertilizer capacity has not only not eased but has intensified. In particular, the country’s policy of limiting the export of small-scale urea and dual-unit fertilizers this year will significantly reduce the amount of fertilizer exports. Affected by the above factors, although the current fertility market is booming in both production and sales, with the emergence of oversupply after the end of spring plowing, the price of chemical fertilizers is falling. It is expected that there will be a turning point in late April.

Guo Quanpu said that the increase in fertilizer prices was due to the passive price increase after the increase in coal, electricity, transportation, and labor costs. It was not a reasonable rise driven by demand. The basis for this increase was not solid. As China will reduce its GDP growth rate to 7.5% this year, it will definitely speed up structural adjustment. It can be predicted that during this year and even the “Twelfth Five-Year Plan” period, China’s demand for coal and other energy and resource products will significantly slow down. The coal supply exceeds demand, prices are falling, and fertilizer prices will continue to lose ground.

Looking at the international market, due to the slow recovery of the global economy, the growth in demand for fertilizers is limited, and the same does not support the rise in fertilizer prices. As for industrial fertilizers, since the second half of last year, the consumption growth of melamine has slowed down. This year it is estimated that production and sales volume will only increase by 2% to 3%, far below the growth rate of about 10% in recent years, and its consumption of urea Pulling action will be significantly reduced.

“With the end of the two sessions, the mine that was temporarily shut down due to the maintenance of stability will inevitably resume production, and the oversupply of domestic coal will soon show up. It is expected that as the price of coal declines from the end of March to the beginning of April, the spring market of the fertilizer market will also The end," said Guo Quanpu.

Wei Dongmi, deputy general manager of Guangxi Liuzhou Chemical Co., Ltd., believes that although the price of coal in the later period and the end of the fertilizer season, the domestic fertilizer market is more likely to be adjusted, but due to the current price of chemical fertilizers from fertilizer companies The cost is not far. Even if there is a correction in the later period, the adjustment will be very limited. Take urea as an example. Once the ex-factory price falls below 2,150 yuan, many companies will be forced to cut production, stop production, reduce fertilizer supply, improve supply and demand, and curb fertilizer prices further.

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