The amount of urea resources will be reduced locally or tight this spring.
Recently, the "2015 Spring Nitrogenous Fertilizer Market situation Analysis meeting" sponsored by the China Nitrogenous Fertilizer Industry Association was held in Beijing. The meeting predicts that nitrogen fertilizer production and sales will improve in 2015, but due to a significant reduction in market resources this spring, local markets may be in short supply.
Gu Zongqin, chairman of the China Nitrogenous Fertilizer Industry Association, pointed out in the theme report entitled "make every effort to do a good job in spring ploughing and fertilizer supply and strive to ensure agricultural production." this year, nitrogen fertilizer overcapacity will improve, agricultural demand will be stable, industrial demand will increase, and export space will be expanded. it is expected that the production and marketing of nitrogen fertilizer in spring will face a relatively good situation.
According to the China Nitrogenous Fertilizer Industry Association, the amount of resources has decreased by about 10% this year compared with the same period last year. According to the data, in 2014, urea production decreased by 1.15 million tons compared with the same period last year, exports increased by 5.35 million tons, and the annual supply decreased by 6.36 million tons compared with the same period last year. Consumption increased by 1.5 million tons compared with the same period last year. 2014 not only digested the previously accumulated stocks, but also consumed most of the urea that should have been carried forward to 2015. On the demand side, urea agricultural demand is expected to remain stable in 2015, and industrial demand will maintain a growth rate of 6% to 8%. It is estimated that the industrial demand for urea in 2015 was 16 million tons, an increase of 1 million tons over the same period last year. The main increment comes from wood-based panels, thermal power, cement flue gas denitrification, vehicle urea and so on. It is understood that the amount of resources decreased significantly in the spring of 2011, and urea prices began to pick up in April of that year.
Su Jianying, director of the Industrial Development Department of the China Nitrogenous Fertilizer Industry Association, believes that the reduction of intermediate turnover and the improvement of logistics efficiency will also become the new normal affecting the nitrogenous fertilizer market. It is understood that at present, the Northeast, Northwest, North China, South China and other areas where fertilizer use is more concentrated in spring have appeared in varying degrees of low social inventory and tight market supply and demand.
Su Jianying said that with the acceleration of the marketization process, it is expected that preferential policies such as taxes, gas prices, electricity prices and freight rates will be adjusted to a certain extent in the future, which will lead to a substantial increase in the cost of nitrogen fertilizer production and circulation. Judging from the current raw material market, the price of raw coal remains stable in spring, and the cost of coal enterprises does not change much. The combination of stock gas and incremental gas from April 1 will lead to a further increase in the cost of nitrogen fertilizer enterprises.
For the international urea price, which is widely concerned by the industry, Ju Hao, a senior analyst at CRU, expects the international market price to find out the bottom and fluctuate at the low level in the second quarter, and rebound around July. He also said that the new international urea capacity will enter a rapid release period from 2015 to 2017, so China's urea market share in international trade will face more international competition in the next 1-2 years, and high-cost production capacity will face withdrawal and integration.
At the meeting, leaders from relevant ministries and industry associations, such as the National Development and Reform Commission, the Ministry of Agriculture, the Ministry of Industry and Information Technology, the Ministry of Finance and the Ministry of Commerce, as well as more than 300 representatives from chemical fertilizer enterprises and industry media, conducted in-depth exchanges and discussions on the spring nitrogen fertilizer market trend, marketing model innovation, international market development and other topics.
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