Fertilizer market also enters "new normal"

The newly held Central Economic work Conference has demonstrated that China's economy has entered a "new normal" from nine aspects: consumer demand, investment demand, export, production capacity, factors of production, market competition, resources and environment. In the future, medium-and high-speed growth, transformation of development mode, deep adjustment of structure and shift of development power are the basic characteristics of China's new economic normal. In this situation, the chemical fertilizer market will also usher in a new normal.

Chemical fertilizer overcapacity in recent years, a large number of chemical fertilizer plants have been built in Inner Mongolia, Xinjiang and other resource areas, and there is a serious overcapacity of nitrogen and phosphate fertilizer in China. By the end of 2013, China's urea capacity had reached 80.7 million tons, an increase of 7.87 million tons over 2012, while two new 800000-ton urea plants were added in Inner Mongolia in the first quarter of 2014. In 2014, the market demand for urea (including domestic demand and foreign exports) was about 67 million tons, with overcapacity of about 15 million tons, which led to the downturn of the urea market. The overcapacity of phosphate and compound fertilizer is also serious, and the proportion of excess capacity of diammonium phosphate and monoammonium phosphate in China exceeded 100% by the end of 2013. According to industry experts, "in some areas of Guizhou, Sichuan and Hubei, with the development and utilization of new phosphate rock resources, they are also investing in new or planned construction of a number of phosphate and compound fertilizer projects to aggravate overcapacity."

Export has an increasing impact on the market due to the serious overcapacity of domestic chemical fertilizer, in order to digest the excess capacity, export has become an inevitable choice, and export factors have a greater and greater impact on the chemical fertilizer market. If the international market is good and the export volume is large, the domestic market may improve; on the contrary, if the international market is poor or because of high tariffs and other reasons, the domestic market cannot improve.

With the improvement of the level of scientific fertilization and the promotion of urbanization, the growth rate of chemical fertilizer demand will obviously slow down in the future, and there will be zero growth or even decline in some places. Recently, the Ministry of Agriculture has also made it clear that the goal is to achieve zero growth in the use of pesticides and chemical fertilizers by 2020.

The fertilizer structure of farmers has changed with the change of agricultural planting structure and the extensive use of mechanization, the fertilizer structure of farmers is also changing. In the past, farmers used more low concentration chemical fertilizers, but now they are more inclined to fertilizers with high concentration and good slow and controlled release effect, which saves both time and effort. In the past, farmers used more common chemical fertilizers, but now new fertilizers such as water-soluble fertilizers, organic-inorganic compound fertilizers and biological fertilizers are becoming more and more popular.

In the past, farmers used more single element fertilizers such as urea, ammonium bicarbonate, calcium superphosphate and potassium chloride, but now they mostly use compound fertilizers, because one-time fertilization of compound fertilizers is equivalent to applying all three kinds of nitrogen, phosphorus and potassium fertilizers, and the utilization rate is higher than that of elemental fertilizers. In the past 20 years, the growth rate of compound fertilizer application in China is significantly higher than that of nitrogen fertilizer, phosphate fertilizer and chemical fertilizer. The compound rate of chemical fertilizer in China was only 2.1% in 1980, increased to 13.2% in 1990, 22.1% in 2000, and further steadily increased to 32.3% in 2010. The compound rate of chemical fertilizer in China is increasing, and it is expected to exceed 50% in the future.

Soil testing and formula fertilization can not promote agricultural production without chemical fertilizer, but excessive application of chemical fertilizer not only causes a waste of resources, but also pollutes the environment. In this case, soil testing and formula fertilization according to soil characteristics and crop fertilizer requirements is the best choice. According to the statistics of the agricultural department, in the first half of 2014, the amount of formula fertilizer used for major food crops in the country was 5.3 million tons (pure), and the application area was 360 million mu, an increase of 17.8% and 20% respectively over the same period in 2013. Formula fertilizer has accounted for about 40% of the total fertilizer application of major food crops.