Summary Post on the Urea Market Conditions and Prices in March 2017

Urea price trends across China Author/Source: China Fertilizer Network Date: 2017-03-01 Clicks: 19 The urea market remains weak overall; actual factory prices have dropped further in some areas. There is only slight demand for urea in Shandong, while some companies continue to raise their prices slightly. The demand for a small amount of agricultural and industrial compound fertilizers in the Shandong region is fairly good. The standard Leave factory price of urea has risen by another 10 yuan per ton, reaching around 1650 yuan; there are also some deals at lower prices... (More details can be found in the member area.) ； Sales in the Two Rivers region are average; in Hebei, the standard factory price remains stable at 1600–1650 yuan, while prices for lower-end products are lower… In Henan, the standard factory price is around 1640 yuan, with considerable room for discounts on the actual transaction price ； The mainstream ex-factory prices in Shanxi region remain stable at 1,580–1,650 yuan; actual transaction prices are determined on a case-by-case basis. According to China Fertilizer Network, some urea manufacturers sell their products outside this region as well…… ； Urea from other provinces is arriving gradually; the urea market in Jiangsu and Anhui remains weak, with prices not yet adjusted ； The mainstream ex-factory prices in the Guangxi region remain stable at 2000–2010 yuan, with some manufacturers offering lower ex-factory prices…… ； The mainstream ex-factory price in Fujian remains stable at 1,900 yuan. Due to a large volume of urea arriving from other provinces, there is severe wholesale price inversion in some areas, while the sales of domestic-produced urea are fairly average. Internationally, …… Overall, local industrial and agricultural demand has shown a slight improvement, and some urea manufacturers have continued to raise their prices ； However, there are few positive factors for exports; the urea market in various parts of the country remains sluggish with slightly rising inventory levels. As a result, most companies continue to maintain stable prices on the surface but actually reduce them secretly. It is expected that the overall market will remain weak on a steady basis in the coming period, and some urea producers may lower their prices. Going forward, attention should be paid to the recovery in urea production rates as well as the onset of agricultural demand. Regional market prices: Unit: yuan/ton (bold in the table refers to large-grain urea)

Urea price trends across China Author/Source: China Fertilizer Network Date: 2017-03-02 Clicks: 24 The urea market is generally weak, with only a few quotes showing a slight increase of 10 yuan per ton (prices are given per ton unless otherwise specified). Temperatures have dropped in the Shandong region, leading to a further slowdown in the procurement of urea as a raw material by industries and farms. The main export price of urea has risen but remains stable at around 1650 yuan; some companies report poor sales performance, and prices may start to fall in the future ； The mainstream ex-factory prices in Hebei region remain stable at 1,600–1,650 yuan; due to weak demand, some large manufacturers are under considerable pressure regarding their urea inventory levels ； In the Henan region, the mainstream ex-factory prices have increased by 10 yuan, reaching 1640–1650 yuan. One large manufacturer has seen an increase in its production volume, while most companies are able to sell their products at ex-factory prices… (Some details are available in the member area; the same applies below). Individual small orders for local sales are slightly higher in price ； The mainstream ex-factory prices in Anhui region remain stable at 1,680–1,700 yuan; deals can often be made at lower prices... Some manufacturers report a slight improvement in sales ； The mainstream ex-factory price in Hubei remains around 1,730 yuan. However, as urea at lower prices from other provinces arrives at local markets, the ex-factory price of urea produced in Hubei is affected accordingly…… ； The mainstream ex-factory prices in the Shaanxi region remain stable at around 1,700 yuan, with one major manufacturer… Internationally, …… Overall, a few domestic urea manufacturers have slightly raised their prices as sales improved due to low prices ； However, there are no clear positive factors on the international front, which makes it difficult to boost China’s urea exports. India has yet to announce a new round of urea tenders, and the production rates of compound fertilizer manufacturers in various parts of the country may decline. Plywood manufacturers in regions such as Hebei have begun to shut down one after another, resulting in a weak urea market. Urea manufacturers’ inventory levels have increased slightly, and backward pricing in certain areas remains severe. As a result, most companies are maintaining stable prices on the surface but actually reducing them secretly. It is expected that the overall market will remain weak, with some urea manufacturers possibly lowering their prices. Going forward, attention should be paid to an increase in urea production rates and the onset of agricultural demand. Regional market prices: Unit: yuan/ton (bold in the table refers to large-grain urea)

Jinlianchuang: The urea market is volatile – are there any expectations for the future? Author/Source: Date: 2017-03-02 Clicks: 34 Three years later, the volatile conditions in the urea market have led to uncertainty regarding its future trends. A key factor contributing to this situation is the imbalance between supply and demand. The utilization rate is rising rapidly, and supply volumes are increasing swiftly ； Transportation is smooth; there is an increase in goods being shipped from regions such as the northwest and north China, which affects the markets at destination stations ； On the demand side, neither industrial nor agricultural demand started as expected, resulting in an oversupply in the market once again. Although companies did attempt to drive up prices during this period, the downstream market showed no interest. The recent slight price rebound in the Shandong market serves as evidence: companies took advantage of the modest start of agricultural demand and environmental-related production cuts to inflate their quotes. However, market prices failed to rise accordingly. In the Linyi market, prices remained steady at 1,650–1,660 yuan per ton. Without any industrial demand to back it up, traders generally had poor sales performance. Therefore, this price hike will undoubtedly end up being just another unfulfilled wish on the part of the companies. Will the urea market, during the traditional peak period of demand in the domestic market, once again follow the trend of previous years and fail to recover? Upon reflection, there are still opportunities in the later market trends. Firstly, **with meetings approaching, environmental protection measures may be strengthened, but this factor might merely serve as a topic for companies to exploit for their own purposes. After all, if environmental regulations are implemented, it will not only lead to a reduction in supply but also to a decrease in industrial demand. If the drop in demand exceeds that in supply, then the market will still be in a state of surplus supply; therefore, the supporting effect of environmental protection measures is likely to be minimal. Secondly, the increase in new demand is what will be the focus of the market in the future. In the agricultural sector, centralized procurement of fertilizers did not take place as expected; as of the end of February, only a few areas had started such purchases. There is still some expectation of further purchases in the future. However, if procurement remains decentralized, the support it can provide to the market will likely be short-lived due to the short time frame involved ； Industrial demand is likely to be the main factor affecting urea in the future. Since summer fertilizers are mainly high-nitrogen types, it is essential for compound fertilizer manufacturers to purchase urea. The key question is when this demand will arise. As of now, some compound fertilizer companies have already introduced policies regarding summer fertilizers; when calculating prices, the cost of urea is typically set at 1,550 yuan per ton. Therefore, the current price of urea does not yet meet the purchasing expectations of these companies, and an increase in industrial demand is still pending. Overall, if environmental regulations can be utilized to curb the increase in production rates, the market conditions are likely to improve when a new wave of demand emerges; therefore, there is still some optimism regarding future market trends. However, in the short term, the outlook is not so optimistic; it is likely that urea prices will decline in the near future. Making a bold prediction, in the case of the Shandong market, prices are expected to drop to 1550–1580 yuan per ton. At that point, a new round of raw material procurement by the compound fertilizer industry is likely to begin, and urea prices will then start to rise again. Nevertheless, they are unlikely to reach the levels seen before the New Year.

Urea price trends across China Author/Source: China Fertilizer Network Date: 2017-03-03 Clicks: 28 The urea market is generally weak, with only slight adjustments in some prices. The mainstream ex-factory price in Shandong region remains around 1,650 yuan per ton (the same unit is used hereafter), while the price for lower-quality products at the time of sale is approximately 1,610 yuan per ton ； Demand in the Two Rivers region is weak; some large manufacturers in Hebei have reduced their export prices by 5 yuan. Meanwhile, it is reported that the price of raw coal has increased by 50 yuan. A very small number of manufacturers in Henan have raised their prices. As a result, the mainstream export prices in Hebei remain stable at 1600–1650 yuan, with actual transaction prices being around... (the omitted details can be found in the member area; the same applies here). The mainstream export prices in Henan remain stable at 1640–1650 yuan ； The prior orders of urea manufacturers in Shanxi region have been largely fulfilled; new orders are coming in at a moderate pace, with some prices reduced. The mainstream factory prices have dropped by 30 yuan, ranging from 1550 to 1650 yuan, while there is virtually no sales at the higher price levels ； The urea market in Shaanxi province is greatly affected by the low-priced urea available in Shanxi, Inner Mongolia, and Xinjiang. The standard ex-factory prices have dropped by 30 yuan, to between 1670–1700 yuan; as for prices for products sold outside the region…, the ex-factory prices of some urea manufacturers located near Inner Mongolia have also decreased…… ； Low-priced urea from other provinces is continuing to arrive in the Guangxi region, posing further downward pressure; the mainstream ex-factory prices in Guangxi remain stable at 2000–2010 yuan. However, some manufacturers report that sales are average, with transactions at lower prices occurring, and there is a possibility of further price drops. Regarding ports, the export price of small-grained urea from China’s major ports has dropped to $231–233 per ton FOB (two orders have already been placed), while the price for large-grained urea… Overall, rising prices of raw coal in some areas may provide slight support for urea costs ； However, the reference offshore price of urea in China continues to decline. There are no positive factors for exports at present; domestic demand is picking up slowly, and downstream buyers remain inactive. The volume of new urea orders remains generally mediocre. Additionally, some urea producers are facing significant inventory pressures. Most companies continue to maintain stable quoted prices on the surface, while actually offering discounts. It is anticipated that the overall market will remain relatively weak in the near term, with some urea producers possibly lowering their prices. Moving forward, attention should be paid to the recovery of urea production rates as well as the onset of agricultural demand. If there is any part of the analysis and market data available on this website that you would like to know more about, you can call the consultation hotline at 0451-88001128. Regional market prices: Unit: yuan per ton (bolded values in the table refer to large-grain urea)

Are high prices gone? How many more challenges will urea face this year? Author/Source: Date: 2017-03-03 Clicks: 22 Should urea levels be reduced further? Originally, it was hoped that as temperatures rose in March and spring plowing began, urea prices would increase due to increased demand from the agricultural sector; however, it now seems likely that prices will fall instead. Some companies say that sales are not performing well, prices may continue to fall, and the overall market is in a weak state. 　　At the Analysis Meeting on the Spring 2017 Nitrogen Fertilizer Market Situation held yesterday, Gu Zongqin, Chairman of the China Nitrogen Fertilizer Industry Association, pointed out that the nitrogen fertilizer market is expected to pick up during the Spring Festival, with market prices rising somewhat; however, competition will remain fierce. 　　What will be the trend of the nitrogen fertilizer industry in 2017? Will the urea market recover? How many opportunities does this year’s urea market still have? 　　Surrounded on all sides, with current negative factors – Last year, the entire nitrogen fertilizer industry was in a state of distress; without policy support or any incentives, the industry had to rely on its own efforts to get through difficult times. Last August, urea prices dropped to their lowest level in over a decade, at around 1,100 yuan per ton; the price was significantly lower than the cost, which led to a sharp decline in the operating rate of enterprises. Currently, about 5 million tons of production capacity remains in a “zombie” state, inactive but not completely shut down. 　　On the international front, weak demand for nitrogen fertilizers in 2016 and falling prices led to a decline in export prices as well. As a result, China’s nitrogen fertilizer products lost their competitiveness in the international market, and export volumes decreased significantly. 　　Reportedly, in 2017, an additional 6.16 million tons of urea production capacity was added overseas. Among this, two facilities in the United States with a combined capacity of 1.6 million tons are expected to become operational in the first half of the year; several other facilities will also be put into service successively. This will inevitably affect the international market and encroach upon China’s export market. It is estimated that China’s urea exports in 2017 will be around 7 million tons. Recently, there have been no clear positive developments on the international front; thus, it is difficult for China’s urea exports to improve, and a new round of urea tenders in India has not yet been finalized. 　　Domestically, with the cancellation of preferential policies, rising coal prices, and increasing logistics costs, the fertilizer industry faces significant pressure to raise its operating costs. Agricultural product prices are low, farmers’ purchasing power has declined, and it is difficult for nitrogen fertilizer manufacturers to pass on the increased costs to downstream users. According to statistics from the Nitrogen Fertilizer Association, by the beginning of 2017, China’s urea production capacity was around 77 million tons, a decrease of 4 million tons compared to the previous year. However, considering domestic demand of about 57 million tons and without taking into account product exports, there was still a 35% surplus in production capacity. 　　On the demand side, the demand for nitrogen fertilizers in China’s agriculture has reached a plateau; in the future, it is not only unlikely to increase significantly but may even decline gradually. According to the Ministry of Agriculture, in 2017 China will continue to reduce the corn planting area by 10 million mu, with 12 million mu of arable land being left fallow. 　　At the beginning of this year, an **Action Plan for Replacing Chemical Fertilizers with Organic Fertilizers in the Production of Fruits, Vegetables, and Tea was issued**; in early March, various regions began to apply for pilot projects and to make such replacements public, thus kicking off the implementation of this initiative. According to estimates by experts from China Agricultural University, the application of nitrogen fertilizer in fruit and vegetable cultivation in China accounts for about 36% of total agricultural nitrogen fertilizer use. The implementation of this action plan will have a significant impact on nitrogen fertilizer consumption in the near future. 　　In terms of production capacity, the operating rate of urea plants in China is currently above 60%. It is estimated that China’s urea production capacity from January to April is around 18.6 million tons. It is understood that in 2017, three urea production facilities were planned to come online in China, with a total capacity of 900,000 tons; it is estimated that only one facility with a capacity of 300,000 tons will actually start operating, meaning that around 5 million tons of urea production capacity will be shut down. The apparent consumption of urea in 2017 is expected to be 51.5 million tons, a 3% decrease compared to 2016. Corporate HR officials said that it is unlikely for urea prices to return to their levels from before the year. 　　The situation is improving, and the future looks promising. According to the comprehensive forecasts of the Nitrogen Fertilizer Association, the urea market and corporate profits in 2017 are expected to be better than those in 2016. Firstly, capacity reduction is being advanced further, and the excess capacity has already been reduced ； Secondly, a steady increase in raw material prices will provide support for prices ； Finally, the market prospects for chemical products such as methanol and liquid ammonia are favorable, which has a positive impact on the urea market. 　　It is reported that within last year, 4.33 million tons of urea production capacity was shut down in the country, and it is expected that another 3 million tons of urea production capacity will be closed in 2017. Furthermore, industrial demand will continue to grow, and the operating conditions of wood panel manufacturers are improving ； Melamine shows good profitability, production levels are improving, and there is additional capacity being added ； Due to increased environmental protection efforts, demand for denitration in thermal power generation and for urea used in vehicles is also expected to keep rising. 　　In terms of energy, coal prices are expected to remain stable or rise slightly in 2017. After the heating season ends, the shortage of natural gas supply is likely to ease, and some urea manufacturers that use gas as a raw material will resume production, although gas prices will still remain high. Regarding electricity prices, it is expected to remain stable in 2017, with slight reductions possible in some areas. It is worth noting that in 2017, the international crude oil market may experience a turning point in supply and demand; a rise in oil prices is highly likely. Such an increase in oil prices will drive up the prices of natural gas abroad, thereby reducing the competitiveness of nitrogen fertilizers produced from natural gas. This, in turn, will lead to higher prices for chemical products derived from methanol and synthetic ammonia, thus supporting international nitrogen fertilizer prices. By then, China’s urea exports will benefit from favorable conditions. 　　Furthermore, current social inventory levels are low. Local distributors have insufficient stock levels and are adopting a cautious approach to stockpiling; the decline in overall inventory levels will pose certain challenges to ensuring a stable supply of fertilizers for this year’s spring planting season. However, it also creates some opportunities in the market. Some officials from urea manufacturers said that there are still some opportunities in the market towards the end of this year. (Agricultural Inputs Herald)

During the spring plowing season, ensure that urea production plants operate normally! Author/Source: Agri-Market Report Date: 2017-03-03 Clicks: 20 At the end of February, a heavy snowfall caused several provinces in the north to suffer from the effects of late-season cold weather, and the similar conditions in the fertilizer industry left fertilizer manufacturers at a loss as to what to do. Just as the operation rate was starting to improve and show signs of recovery, it faced another round of strict environmental inspections ； The urea market was optimistic before the New Year, but turned out to be very different from expectations after it ； It was thought that with no supply in the market, prices would rise accordingly, but unexpectedly, agricultural product prices fell and farmers’ purchasing power was not sufficient to cover the costs. So, can the utilization rate recover? Will urea prices rise or fall? Is high pressure on environmental policies good or bad for businesses? 　　The utilization rate will receive policy support. Recently, “utilization rate” has become a term of interest across the entire industry. In 2016, increased pressure from environmental regulations led to restrictions on the operating capacity of nitrogen fertilizer manufacturers. According to data from the China Nitrogen Fertilizer Association, the operating rate of urea production across the country declined steadily starting in April 2016; it fell below 50% by the time of the Spring Festival, with some smaller plants even shutting down completely. After the Spring Festival, the employment rate did recover to some extent, but the increase was not significant. In particular, **as regulations are about to be implemented and environmental controls tightened once again, many enterprises have no choice but to cut costs and strictly limit their operating rates. 　　The inability to resume operations is a major problem facing many urea manufacturers at the moment. Officials from the National Development and Reform Commission said, “We have reached an agreement with the environmental protection authorities to ensure that companies that meet environmental standards can continue operating throughout the spring planting season.” ”She said that urea is an important type of fertilizer for spring plowing, and the operating rate of urea production plants is crucial for the smooth progress of spring plowing. The Economic and Trade Department of the National Development and Reform Commission has conducted a thorough analysis of the current issues in the fertilizer market. It will issue an urgent notice titled \"On Ensuring the Supply of Fertilizers during the Spring Plowing Season\" in the near future, in collaboration with 10 other departments, in order to guarantee the supply of natural gas, coal, and raw materials to fertilizer manufacturers during this period and to address the situation of production constraints within the industry. 　　Supply and demand determine market prices. \"In off-peak seasons, costs play a role; in peak seasons, supply and demand do.\" ”said Chen Aimin, deputy general manager of EtherSky. He believes that the fundamental reason why the fertilizer market was optimistic before the New Year this year but became sluggish after it was the change in supply and demand. There was a shortage in the market before the New Year, so many people are optimistic about the fertilizer market. However, in 2016 there was a severe reduction in crop yields and falling prices for agricultural products, which led farmers to be reluctant to invest in their land. As market demand decreased, the market failed to pick up during the peak season, and there was little increase in urea prices. “Currently, supply and demand are relatively balanced; prices remain stable during the spring plowing season with a slight upward trend, though not significantly. It is difficult to predict urea prices after the peak period of spring plowing. ”Chen Aimin analyzed the trend of urea prices in 2017. 　　The deputy general manager of Jiuhe Co., Ltd. expressed the same view. He believes that there is still inventory in the market at present, and it will take time to absorb it, with the overall situation trending toward stability. As the operating rate increases, urea prices in spring may decline due to factors such as an oversupply and reduced demand. However, it is possible that there will be temporary price increases in certain areas owing to concentrated fertilizer demand during spring, difficulties in logistics and transportation, and supply shortages. 　　“Urea is now a product subject to full market competition, and its price fluctuations depend on supply and demand conditions. ”Wang Liqing, secretary-general of the China Nitrogen Fertilizer Association, said. He believes that the urea market should focus on stability at present; although there is not much inventory at the downstream level, there will be no problems with urea supply in spring. With the phasing out of outdated production capacity and the selection of higher-quality products, China’s nitrogen fertilizer industry is bound to experience a new renaissance; confidence in the market is necessary. 　　Environmental protection is a double-edged sword. The current situation in the fertilizer industry is closely related to environmental factors, but the increasing pressure from environmental policies truly represents a double-edged sword for this industry. 　　“The policy pressure related to environmental protection cannot be simply considered either positive or negative. ”Zhang Wenwu, director of Henan Xinlianxin Fertilizer Co., Ltd., spoke. He believes that the increasing pressure from environmental policies affects not only our operational capacity but also that of downstream demand. 　　Ye Weili, an associate researcher at the Environmental Planning Institute of the Ministry of Ecology and Environment, also said that the State Council’s 13th Five-Year Plan for ecological and environmental protection adopts an approach that emphasizes prevention at the source, promotes structural reforms on the supply side, strengthens quality management, implements three key action plans, carries out targeted remediation efforts, and advances the achievement of standard emissions as well as the reduction of pollution. Enterprises that have been exceeding emission limits for a long time, those lacking the capacity or willingness to carry out pollution control, and those with no hope of meeting the standards shall be shut down and phased out in accordance with the law. This has undoubtedly played a significant role in advancing the process of reducing overcapacity, and through the principle of survival of the fittest, the competitiveness of China’s nitrogen fertilizer industry will also see a marked improvement. 　　Overall, the urea market remained stable during the spring plowing season; in some areas, there might be a short-term shortage of supply during the peak period for fertilizer use in spring, leading to a slight increase in prices, though the increase would not be significant. As the utilization rate increases, the low inventory levels in the market will also ease. “The pace of capacity reduction is accelerating; a large number of long-idle \"zombie enterprises\" as well as those that fail to meet environmental standards are exiting the market. The problem of overcapacity is gradually diminishing, and the overall competitiveness of the urea industry will reach a new level. (Jiao Zixuan)

Analysis of the Monthly Operating Rate in the Urea Market Author/Source: JLCC Fertilizers Date: 2017-03-03 Clicks: 20 According to JLCC’s statistics on the production volumes of urea manufacturers across the country, in February 2017 (a total of 28 days), the national urea production volume was around 4.0249 million tons, representing a 2.31% decrease compared to the previous month. The average daily production volume was 143,700 tons, while the average operating rate of these manufacturers was 58.41%, an increase of 8.71% compared to the previous month. In Shandong, the main production region, urea production in February amounted to 526,800 tons, with an average operating rate of 66.76%; overall production increased ； In Henan province, the average production rate in February was 61%, with output amounting to 433,000 tons ； The production volume in Jiangsu region is 234,600 tons, with an operation rate of 58.80% ； The production volume in Anhui region is 221,200 tons, with an operating rate of 74.04% ； The production volume in Hebei region was 216,800 tons, with an operating rate of 64.71% ； The production in the Shanxi region is 532,000 tons. This month, around 12 domestic urea production plants underwent maintenance. Most of the plants that had been shut down earlier resumed operations, which led to a rapid increase in production rates in February. However, environmental regulations have reduced output to some extent; companies such as Shandong Hualu Hengsheng, Shandong Yangmei Pingyuan, and Jiangsu Funing Shuangduo all saw a decrease in their production volumes. It is expected that the pace of recovery in production rates will slow down in March, with overall production likely to remain between 63% and 65%. (Cai Yingchao)

Tariffs on the export of nitrogen and phosphorus fertilizers were removed in 2017 – What is the impact on fertilizer industries? Author/Source: Agri-Materials Review Date: 2017-02-20 Clicks: 58. In 2016, the first year of the 13th Five-Year Plan period, China’s petroleum and chemical industry performed better than expected, maintaining stability while showing signs of improvement. However, there was significant variation in economic growth within the industry; in particular, the fertilizer manufacturing sector had the worst performance among all sub-sectors of the chemical industry. The meeting expects that the profitability of the fertilizer industry will improve compared to the previous year in 2017, but it will be difficult to achieve a significant turnaround. This is information obtained by the reporter from a press conference on the economic performance of China’s petroleum and chemical industry, held in Beijing on February 16. 　　Data from the press conference showed that in 2016, the petrochemical industry reversed its negative growth trend that had persisted for 20 consecutive months. Enterprises above a certain size generated main business revenues of 13.29 trillion yuan for the whole year, representing a 1.7% increase; their total profits amounted to 644.4 billion yuan, remaining roughly the same as in the previous year. Among them, the chemical industry generated main business revenue of 9.21 trillion yuan, a year-on-year increase of 5.3%, with total profits of 507.3 billion yuan, representing a growth of 11.7%. Fu Xiangsheng, vice president of the China Petroleum and Chemical Industry Federation, said at the meeting that the performance of the petrochemical industry in the first year of the 13th Five-Year Plan was indeed remarkable, indicating that the industry is moving in a stable and positive direction. 　　Zhu Fang, director of the Information and Market Department of the China Petroleum and Chemical Industry Federation, pointed out that a significant divergence in economic growth within the petroleum and chemical industry is a key feature of its economic operations. There is clear regional differentiation as well as differentiation among enterprises; disparities in the growth rate of added value and in main business revenues are also prominent. “In terms of the net profits of various sub-sectors within the chemical industry in 2016 compared to the previous year, the chemical mining sector recorded a loss of 2.31 billion, while the fertilizer manufacturing sector suffered a loss of 27.74 billion. All other sectors showed positive profits. It can be said that in 2016, the foreign trade and domestic demand for fertilizers faced severe challenges. ”Zhu Fang said. 　　Speaking of the fact that the fertilizer industry had the worst performance among all industries in the petrochemical sector in 2016, Fu Xiangsheng said that overcapacity in the fertilizer industry was the most pronounced issue among the 27 industries in the petrochemical sector. The poor profitability of the fertilizer industry in 2016 was due to the fact that both domestic demand and foreign trade for fertilizers remained at low levels throughout that year; all the discounts available for fertilizers were removed, and rising costs related to logistics and energy consumption led to higher production costs for fertilizers in 2016. Regarding the trends in the fertilizer industry in 2017, Fu Xiangsheng said that the removal of export tariffs on nitrogen and phosphorus fertilizers that year was beneficial for the industry; it is expected that the profitability of the fertilizer sector will improve compared to the previous year. However, he believes that a significant turnaround is unlikely, as the problem of overcapacity in the industry has not been resolved fundamentally. 　　In response to questions from our newspaper’s reporters, Fu Xiangsheng said that although the industry is facing difficulties, the way forward for the fertilizer industry lies in focusing on reducing production capacity, lowering consumption, saving energy and reducing emissions, as well as adjusting the product mix. Fu Xiangsheng said that in 2017 the world economy was still in a process of slow recovery. Low global economic growth, low investment levels, low trade growth, and low inflation would continue, while the complexity, instability, and uncertainty of the world economy would become even more pronounced. New forms of protectionism were on the rise, and it was inevitable that global trade would remain sluggish. Therefore, new drivers of growth for the fertilizer industry have not yet emerged, and there is a lack of support for a significant turnaround in the sector. (Ma Yanping)

Fertilizer exports dropped sharply in January Author/Source: Agri-Materials News Date: 2017-02-20 Clicks: 61 Although export tariffs on fertilizers in China were significantly reduced in 2017, with zero tariffs applied to nitrogen and phosphate fertilizers, and only tariffs remaining for potassium fertilizers and potassium-containing compound fertilizers, this did not result in an increase in fertilizer exports. **According to the latest statistics released by the customs, in January 2017 China exported 1.12 million tons of fertilizers, a significant drop of 53.2% compared to the previous year ； The export value was 231 million US dollars, a decrease of 61.4% on a year-on-year basis. According to analysis, there are three main reasons for the sharp drop in China’s fertilizer exports in January: first, companies focus on domestic sales. After last October, the prices of products such as urea rose sharply; although the prices of imported fertilizers also increased, the increase was not as significant as that in the domestic market. Companies achieve higher profits from sales in the domestic market compared to exports; therefore, most fertilizer companies prefer to focus on domestic sales, resulting in a decrease in fertilizer exports. Second, international market demand is weak. India is China’s main exporter of fertilizers. Due to factors such as low prices of agricultural products and high import volumes in the year before last, demand in the Indian market has remained weak since last year; from April last year to January this year, sales of urea in India declined by 6.5%. Latin American countries such as Brazil are also major exporters of fertilizers to China, and demand there is also weak. As a result, China’s export orders have declined significantly on a year-on-year basis in recent months. Third is the Spring Festival factor. The long holiday during the Spring Festival leads to reduced market activity, which also has an impact on fertilizer exports. The Spring Festival was celebrated in February last year and in January this year, and these long holidays were also a major reason for the sharp drop in fertilizer exports in January this year. According to customs statistics, China’s fertilizer imports also decreased in January this year. In January, China imported 1.06 million tons of various fertilizers, a decrease of 5.4% compared to the previous year ； The import value was 254 million US dollars, a decrease of 32.8% on a year-on-year basis. (Zhou Heping)

The fertilizer industry is likely to show improvement on a year-on-year basis this year. Author/Source: Date: 2017-02-21 Clicks: 85. In 2016, the first year of the 13th Five-Year Plan period, China’s petroleum and chemical industry performed better than expected, maintaining stability while making progress; however, there was significant variation in economic growth within the industry, with the fertilizer manufacturing sector ranking last in terms of performance among all chemical sub-sectors. The meeting expects that the profitability of the fertilizer industry will improve compared to the previous year in 2017, but it will be difficult to achieve a significant turnaround. This is information obtained by the reporter from a press conference on the economic performance of China’s petroleum and chemical industry, held in Beijing on February 16. 　　Data from the press conference showed that in 2016, the petrochemical industry reversed its negative growth trend that had persisted for 20 consecutive months. Enterprises above a certain scale generated main business revenue of 13.29 trillion yuan for the whole year, representing a 1.7% increase; their total profits amounted to 644.4 billion yuan, remaining roughly the same as the previous year. Among them, the chemical industry generated main business revenue of 9.21 trillion yuan, a year-on-year increase of 5.3%, with total profits amounting to 507.32 billion yuan, representing a growth of 11.7%. Fu Xiangsheng, vice president of the China Petroleum and Chemical Industry Federation, said at the meeting that the performance of the petrochemical industry in the first year of the 13th Five-Year Plan was indeed remarkable, indicating that the industry is moving in a stable and positive direction. 　　Zhu Fang, director of the Information and Market Department of the China Petroleum and Chemical Industry Federation, pointed out that a significant divergence in economic growth within the petroleum and chemical industry is one of the main characteristics of its economic operations. There is clear regional differentiation as well as differentiation among enterprises; disparities in the growth rate of added value and in main business revenues are also prominent. “In terms of the net profits of various sub-sectors within the chemical industry in 2016 compared to the previous year, chemical mineral mining recorded a loss of 2.31 billion yuan, while the fertilizer manufacturing sector suffered a loss of 27.74 billion yuan. It can be said that in 2016, the export and domestic market for fertilizers faced severe challenges. ”Zhu Fang said. 　　When discussing the issue of the fertilizer industry ranking among the worst in terms of performance within the entire petrochemical sector in 2016, Fu Xiangsheng said that overcapacity in the fertilizer industry was the most pronounced among the 27 industries in the petrochemical sector. The poor performance of the fertilizer industry in 2016 was due to the fact that both domestic demand and foreign trade for fertilizers remained at low levels throughout that year; all the discounts available for fertilizers were removed, and rising costs related to logistics and energy consumption led to increasing costs for fertilizers in 2016. Regarding the trends in the fertilizer industry in 2017, Fu Xiangsheng said that the removal of export tariffs on nitrogen and phosphorus fertilizers that year was beneficial for the industry; it was expected that the profitability of the fertilizer sector would improve compared to the previous year. However, he believed that there would be no significant turnaround, as the problem of overcapacity in the industry had not been resolved fundamentally. 　　In response to questions from our newspaper’s reporters, Fu Xiangsheng said that although the industry is facing difficulties, the way forward for the fertilizer industry lies in focusing on reducing production capacity, lowering consumption, saving energy and reducing emissions, as well as adjusting the product mix. Fu Xiangsheng said that in 2017 the world economy was still in a process of slow recovery. Low global economic growth, low investment levels, low trade growth, and low inflation would continue, while the complexity, instability, and uncertainty of the world economy would become even more pronounced. New forms of protectionism were on the rise, and it was inevitable that global trade would remain sluggish. Therefore, new drivers of growth for the fertilizer industry have not yet emerged, and there is a lack of support for a significant turnaround in the sector. (Agricultural Inputs Herald)