April 23, 2024

Low fertilizer plant operating rate will affect the spring plowing

At the end of the year and the beginning of the year, it was usually when fertiliser companies started production at full capacity. However, the production enthusiasm of fertilizer companies this year was not high and the operating rate was low. According to Liu Shulan, secretary general of the China Nitrogen Fertilizer Industry Association, the operating rate of nitrogen fertiliser companies in the country can only be maintained at 70%. In severe cases, even 70% of the operating rate may not reach.
Poor enthusiasm of manufacturers may affect spring plowing. “The decline in the utilization rate of chemical fertilizer production equipment will inevitably lead to a reduction in fertilizer production, and the purchase of downstream stockpile dealers in winter reserves is still relatively small. In the spring plowing period, the fertilizer market in China may experience tight supply.” CIC Advisor Chemical industry researcher Yan Zhi pointed out in an interview with reporters.
According to conservative statistics, the current domestic urea production capacity has reached 68 million tons. If the 70% operating rate is used, the monthly output will only reach 4 million tons, and the urea capacity will ideally be 4.5 million tons per month. This calculation of spring plowing and fertilizer next year will be threatened, coupled with the current increase in raw material prices, before the large number of urea exports, dealers take a wait-and-see attitude, light storage companies due to factors such as lack of high reserve, originally used to regulate the season season The "light pool" effect of the pool will not guarantee sufficient supply for the market.
Chang Yuzhi pointed out that the lack of operating rate of chemical fertilizer companies is due to the fact that the chemical fertilizer market is currently in a downturn and production costs are continuously rising. The profitability of related companies is relatively small, and some companies have even suffered losses. Fertilizer companies have to decide to reduce construction costs. The rate level was also cut off; on the other hand, due to the country's adjustment of export tariffs on chemical fertilizers last year, the export of chemical fertilizers was blocked, and the production enthusiasm of fertilizer companies was greatly affected, resulting in a decline in the operating rate of fertilizer production facilities.
People in the industry generally believe that this phenomenon will continue, and the enterprises that have converted or bankrupted will continue to increase. China's urea production capacity will rapidly shrink, which will not only endanger the safety of the chemical fertilizer industry, but will eventually jeopardize the safety of agricultural production.
In the face of such embarrassment, the association, provincial departments, and chemical fertilizer companies all reflected that the fertilizer industry has entered the market economy, but it has its own particularities. On the one hand, there are seasonal characteristics of off-season storage and sales in peak seasons. On the other hand, in order to ensure agriculture With healthy development, it is impossible for fertilizer prices to completely “follow the market”. These two salient features urgently require the relevant state departments to implement the necessary measures for the price of chemical fertilizers and the supply of raw materials to conduct overall coordination.
Experts in the industry have suggested that if we want to change the long-term loss of the company, we must straighten out the price relationship and study and establish the fertilizer price index so that we can fundamentally guide the production and circulation of chemical fertilizers. It is recommended that the state increase the price of raw materials for fertilizer production enterprises, support the extension of chemical fertilizers, and establish national and provincial fertilizer production and supply bases.
At the same time, there is a need for further adjustments within the fertilizer industry. In view of the fact that many fertilizer companies are no longer able to continue production, the state should establish a mechanism for entry and withdrawal of fertilizer companies as soon as possible so that enterprises that cannot reproduce can withdraw from the fertilizer industry and resolve conflicts. At the same time, it will increase support for powerful fertilizer companies and encourage them to encourage them. It develops the fertilizer industry and ensures the demand for agricultural fertilizers.
“In recent years, China has initiated the reform of the pricing mechanism for fertilizers and further deepened the reform of the circulation mechanism of fertilizers. However, the current development of the domestic fertilizer industry is still constrained by factors such as serious overcapacity, rising raw material prices, and imperfect circulation systems. In the future, the further development of China's fertilizer industry will also need to speed up the elimination of the backward production capacity of the fertilizer industry, and carry out industrial restructuring and industrial upgrading,” Chang said.
Authoritative sources also revealed that the "Twelfth Five-Year" development plan (discussion draft) of the nitrogen fertilizer industry has been issued to related companies. The plan proposes that one of the objectives of the “12th Five-Year Plan” for the nitrogen fertilizer industry is to significantly increase industrial concentration. The proportion of large-scale nitrogen fertilizer production enterprises accounts for more than 80%, the number of enterprises will fall below 250, and 20 large-scale nitrogen fertilizer enterprises with core competitiveness will be established. group. Improve industrial concentration and competitiveness, and realize the transformation of growth mode.

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