Although the winter storage of chemical fertilizer has been opened, the progress of the reserve is slow.

Towards the end of the year, this year's winter reserve has also been officially opened. At the same time, with the introduction of the 2015 tariff implementation Plan in mid-December, tariffs during the off-peak season window period were explicitly abolished, causing most fertilizer enterprises to be optimistic about the fertilizer export situation next year. This has led to a rise in the urea market, which has been depressed for a long time.

At present, the winter reserve has played a role in boosting market confidence. At the beginning of this month, the ex-factory price of urea in Shandong was 1460-1500 yuan / ton, but now it has risen to 1530-1560 yuan / ton. In addition, Yang Tongyu, assistant general manager of Henan Jinkai Group Yanhua Chemical Co., Ltd., said that due to the favorable tariff policy and the start of winter storage, the price of urea in Henan has recently risen by 40-50 yuan / ton, and the mainstream ex-factory price has risen to 1530-1540 yuan / ton.

With regard to the introduction of the new tariff policy, one analyst predicted that although it has no direct impact on this year's winter storage, it may affect domestic fertilizer supply and demand at the beginning of next spring. According to statistics, from January to November this year, domestic urea exports reached 12 million, a record high. The cancellation of the peak season window means that enterprises have one more way to reduce production capacity, and it is expected that the excess domestic urea capacity will be further consumed at the beginning of next spring.

Although the winter reserve has been opened, the progress of the reserve is slow. In recent years, the decreasing profits of domestic winter storage make the grass-roots dealers wait and see atmosphere is strong, and at present some enterprises are still mainly to execute the previous orders, the transaction of new orders is slow, and the supply is mostly concentrated in the hands of large dealers. As it will take time for spring ploughing to use fertilizer, at present, the shipping price of large dealers is higher, and the grass-roots level is generally enthusiastic to take the goods.

The primary reason for the slow progress of winter storage is the unprofitability of grass-roots dealers in winter storage. Take urea as an example, the purchase price for winter storage is 1550 yuan per ton. taking into account the freight of 40-50 yuan per ton, interest paid during the winter storage period, labor costs and warehousing costs of about 40-50 yuan, the price will be at least higher than 1650 yuan / ton in the coming year to make a profit. However, in recent years, the prices of many winter-stored urea will decline after the year, so the above prices are basically impossible to achieve. At the same time, at a time when traffic conditions are becoming more and more convenient, many retailers are determined to give up winter storage and choose spring ploughing to follow the market.