Operation status of Urea Export Market in China in 2014

Affected by the supply and demand of energy and resources, new changes are taking place in the global nitrogen fertilizer industry. Nitrogen fertilizer production is transferred to the Middle East, North America and other resource places with lower energy prices. At the same time, with the rise in fertilizer prices, prompting fertilizer consumers such as India and Vietnam to adopt a self-sufficiency strategy, some production facilities are also being built. From 2013 to 2017, the production capacity of new urea plants abroad will exceed 33 million tons. At present, China's main export markets such as India and the United States will expand production by nearly 13 million tons, while China's current competitors such as North Africa and the Middle East will expand production by 20 million tons. The release of the production capacity of these plants will certainly exert great pressure on China's nitrogenous fertilizer industry, which will face domestic and foreign difficulties in the future, and urea exports will also face great pressure.

Compared with 2013, the 2014 tariff plan "loosened" chemical fertilizer exports as a whole. in the process of market-oriented reform, the preferential range of chemical fertilizer preferential policies decreased year by year, and the further "loosening" of chemical fertilizer exports became a trend. this has also alleviated the pressure of domestic overcapacity to a certain extent. Since January 1, 2014, China has implemented a new tariff policy in the off-peak season, with an export tariff of 40 yuan per ton in the urea off-season (July-October) and an export tariff of 15% 40 yuan per ton in the peak season (January-June, November and December).

The peak of export volume in 2014 was in October, with an export volume of 1.5623 million tons and a value of US $455.3512 million. Exports increased by 5% month-on-month and 58% over the same period last year. October is the last month of the low-tariff window, and domestic demand is off-season, and manufacturers want to take as many orders as possible before exports are closed. Internationally, India bought 800000 tons of small particles at the end of October due to insufficient domestic demand, and some dealers shipped directly from the bonded area. This tender will support the domestic market to a certain extent, especially at a time when exports are about to be closed.

According to customs statistics, compared with 2012 and 2013, urea exports from January to October 2014 were 9.6382 million tons, with an export value of US $8.1855516 billion, an increase of 47.67% over the same period in 2013 and 150.87% over the same period in 2012. During the low tariff window in 2014 (July-October), urea exports were 5.4655 million tons, with an export value of US $1.5347826 billion, an increase of 4.88 per cent over the same period in 2013.

The export of chemical fertilizer helps to alleviate the problem of overcapacity in China. However, with the change of the international situation, the situation of domestic fertilizer export is becoming more and more serious. In order to alleviate the pressure of inventory and capital, enterprises have to make great efforts to export. However, in 2013, China's chemical fertilizer exports have been in a situation of incremental price increase, with the export volume increasing by 18.96% compared with the same period last year, while the export value decreased by 5.37% compared with the same period last year. Affected by factors such as the continued increase in new production capacity in 2014 and the domestic need to resolve the contradiction between supply and demand through exports, urea exports remain high. However, in view of the results of three tenders in India this year, domestic production enterprises have also shown helplessness and thinking. The lowest prices of the two bids on June 18 and July 21 were US $249 / ton and US $258-US $260 / ton respectively in China, and the intention of foreign investors to short the Chinese market was obvious. In order to maintain the domestic export order, the China Nitrogenous Fertilizer Industry Association came forward to draft the Urea Export self-discipline Convention, which made the third tender price basically in line with the domestic market price under the unanimous resistance of the industry, but still lower than the mainstream price in the international market. Thus it can be seen that in the export negotiations, domestic manufacturers are in a more passive position, which weakens their strength in the international competition.

In view of the abolition of the off-peak season in 2015, the annual tariff policy of 80 yuan per ton will be implemented, which may be good for the domestic urea market. It is also very important to improve the efficiency of export products, innovate the export mode, maintain the market competition order with action, and improve the competitive position of China's urea export in the international market.