In 2007, macroeconomic regulation and high oil prices will constitute two major macroeconomic backgrounds for the operation of the basic chemical industry. In the whole year of 2006, the profit of chemical industry increased by 20%. It is predicted that the 2007 annual results will be expected to achieve a 10% growth, slightly higher than the GDP growth rate.
From the perspective of sub-sectors, the polyurethane industry is a fine chemical product, which is different from traditional bulk chemical raw material products. Overall, it is relatively limited by macro-control. In addition, chemical fertilizers and pesticides are typically supported by the agro-industry industry, and their impact on macroeconomic regulation is also limited, and their downstream demand markets show steady growth under the background of national support for agriculture policies.
Potassium fertilizer prices are low there is room for growth
According to statistics, in 2007, China's imported potassium chloride (FOB) contract price rose, which is the basis for the ex-factory price of potash potassium chloride in salt lakes to be raised by 30 to 40 yuan/ton again in March. At the same time, the strong demand for spring plowing and the rising wholesale price of ports have become the market support factors.
In the international market, India will soon sign a contract for imported potassium chloride, which will become the focus of the international potash fertilizer market. It is rumored that BPC (combined newly by Belarus Potash Corp. and Ural Potash Corp.) requested a price increase of $50/ton CFR. In addition, Brazilian potassium chloride prices have risen by more than US$25/ton in 2007, but Canpotex (the world's largest potash fertilizer company PotashCorp, the third-largest company Mosaic, and the ninth largest company Agrium North American Potash fertilizer joint export distributor) are preparing On June 1, the price of Brazil will increase by another 25 U.S. dollars per ton.
Rising prices in India and Brazil will also boost the price of potassium chloride in other markets such as Southeast Asia. At the same time, the rise in international grain prices indirectly stimulated the demand for potash, and the rise in ocean freight prices was also a major factor in the continued rise in global potash fertilizer prices in 2007. In the past, the author pointed out that the contract price of imported potassium chloride in China rose by only US$5 per ton in 2007 (negotiating parties consider the sea freight factor) to make China continue to be a low-cost zone in the international potash fertilizer market. The recent increase in the price of international potash fertilizer market has been further strengthened. This point of view, China's potash prices still have room to rise.
The seasonal trend of nitrogen fertilizer is obvious
The rise in international agricultural product prices, the imminent peak demand season, and rising energy prices have pushed up domestic and international urea prices. After a sharp increase in the previous period, prices of urea fell in markets such as Yuri, Baltic and Romania in late March.
Due to the spring plough and fertilizer, the price of domestic urea was increased. In 2007, the winter storage process was normal, and the urea price started normally. It is expected that with the arrival of fertilizer season, the urea price will remain stable and high. In the second half of the year, the off-season will come and prices will fall.
In order to ensure the spring plowing, the National Development and Reform Commission did not issue "the policy of market price reform of fertilizer prices" before the two sessions. However, from the previous year's situation, the urea price limit policy was “existent in name†for the ex-factory price. The cancellation of the urea industry's preferential policies has increased the production costs of enterprises and has become an important factor in supporting the price of urea.
DAP prices rise momentum
The rise in international grain prices has increased the farmers' ability to absorb fertilizer prices and stimulated the demand for phosphate fertilizers, while the rising prices of raw materials such as synthetic ammonia and sulfur have also played a catalytic role. At the same time, soaring international prices have also driven China's export price of diammonium phosphate (DAP). China's DAP continued its trend of increasing imports in 2006. In the first two months of 2007, imports were 430,000 tons, a year-on-year decrease of 17% and exports of 90,000 tons, an increase of 61.3% year-on-year. China's imports of DAP originate mainly from the United States and Morocco, and its export markets are mainly in Southeast Asia such as Vietnam (65% in 2006), but Southeast Asia has a lower market heat than Latin America.
At the same time, the gradual increase in shipping charges has restricted Chinese DAPs from entering the hot market in Latin America and has affected the soaring export prices. Therefore, the cloud and your company that are close to the export market and account for 90% of China's DAP exports benefit the most. Since the beginning of the year, the cumulative price increase has been 150-200 yuan/ton. The price increase in the international market will inevitably be transmitted to the domestic market, but it will also have to face the pressure of transmission attenuation, domestic oversupply, and compound fertilizers to replace DAP. At the same time, we must also pay attention to the collection of phosphate rock ore price adjustment funds in Hubei, and the rise in ammonia and sulfuric acid prices support DAP prices.
MDI prices rose significantly
The demand for polymerized MDI (diphenylmethane diisocyanate) for thermal insulation and start-up of insulation was adopted. After the Spring Festival, the slurry and sole stock solution companies started to start demand for pure MDI. At the same time, the Shanghai Lianheng MDI device was delayed indefinitely, and the decrease in the number of imported MDI (mainly pure MDI) in the first two months of 2007 directly led to a significant increase in MDI prices since March.
The fall in the price of DMF (dimethylformamide) and the increase in the price of spandex also made it possible for downstream companies to withstand the increase in MDI prices. Since March, the aggregate MDI listing price has been raised by 6,000 yuan/ton to 27,500 yuan/ton, and pure MDI has been raised by 2,100 yuan/ton to 24,300 yuan/ton.
TDI price rational return
Foreign TDI (toluene diisocyanate) demand is not strong. The idle and shutdown of the equipment led to a negative growth in global TDI capacity in 2005 and 2006. It is expected that the expansion of China's TDI capacity will promote the growth of global capacity growth, and the growth rate in 2009 will reach 16.3%.
In the past two years, the growth of domestic TDI demand has slowed down and production growth has gradually replaced imports. Under the background of the unexpected supply of foreign supplies, the issue of Shanghai's BASF TDI device in October 2006 has become a stimulating factor for price surges. In January 2007, the Shanghai plant started to achieve normal production, and domestic TDI prices turned a corner. However, the high TDI price also inhibited the start of the downstream sponge factory, and there was also a partial replacement by MDI.
DMF faces capacity expansion pressure
In the third quarter of 2006, the price of methanol was significantly increased due to the accidents of foreign installations, which led to a further increase in the price of DMF (dimethylformamide). With the improvement of methanol supply and prices, the DMF prices fell in early 2007. It is worth noting that the expansion of 4 DMF projects in 2007 and the start of construction of Shandong Zhangqiu and other devices gradually became normal in 2007. In 2007, the DMF market was facing pressure for capacity expansion, and prices may have declined.
High prices of soda ash and caustic soda
In March, driven by the growth of chemical fertilizers, pesticides, building materials, textiles and other downstream industries, the demand for soda ash was gradually increasing. In some regions, supply tension was once apparent. The operating rate of soda ash makers remained high, and it is expected that the soda ash market will remain in the future. The current high run.
In terms of caustic soda, the price of caustic soda in China showed a trend of first inhibition and increase after the rapid growth of exports and the rapid growth of downstream industries such as electrolytic aluminum and viscose, as well as the increase in electricity prices. The price of caustic soda in 2007 is expected to increase. Presented a high consolidation situation. On the one hand, the expansion of domestic caustic soda production is still relatively fast. On the other hand, the caustic soda market supply in North America and Western Europe continues to remain tense. The rapid development of South Asia's textile industry stimulates consumption of caustic soda. The increase in China's exports of caustic soda will ease the domestic oversupply situation.
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