Review of the nitrogen fertilizer and methanol industry’s performance in 2018

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Review of the Nitrogen Fertilizer and Methanol Industries: Performance in 2018 Author/Source: Sinochem News Network Date: 2019-07-17 Clicks: 14 Benefits for nitrogen fertilizers reached their best level in 10 years; overall performance in the methanol industry improved as well. According to Sinochem News Network, 2018 was a remarkable year – the nitrogen fertilizer industry achieved its best results in nearly 10 years, while the overall performance of the methanol industry also improved throughout the year. The levels of localization, scale expansion, and sustainability in these industries continued to rise steadily. This is information obtained by the reporter from the 2019 China Nitrogen Fertilizer and Methanol Technology Conference, which was held in Zhumadian, Henan from July 6 to 8. 　　New progress has been made in the industry’s efforts to adjust its structure and reduce production capacity in the nitrogen fertilizer sector. According to Gu Zongqin, president of the China Nitrogen Fertilizer Industry Association, statistics from the association show that last year, China’s production capacity for synthetic ammonia was reduced by 5.55 million tons per year, while the production capacity for urea was cut by 4.94 million tons per year. The total production capacity for both synthetic ammonia and urea dropped below 70 million tons per year, to 66.89 million tons per year for synthetic ammonia and 69.54 million tons per year for urea. This represented a decrease of 6.4% and 4.4% respectively on a year-on-year basis, thereby alleviating the problem of overcapacity. By the end of 2018, the capacity utilization rate for synthetic ammonia had reached 83.9%, showing a significant improvement compared to the beginning of the 13th Five-Year Plan period. 　　Gu Zongqin pointed out that the elimination of outdated production capacity and the commissioning of high-quality production capacity have further optimized the structure of the nitrogen fertilizer industry. By the end of 2018, the synthetic ammonia production capacity using advanced gasification technology amounted to 24.85 million tons per year, accounting for 37.2% of the total production capacity, an increase of 3.5 percentage points on a year-on-year basis. The urea production capacity achieved through advanced gasification technology was 25.49 million tons per year, representing 36.7% of the total production capacity, with a rise of 2.4 percentage points compared to the previous year. The production capacity of ammonia and urea via traditional gasification processes has further decreased. 　　Unlike the nitrogen fertilizer industry, China’s methanol industry is still in a phase of steady capacity growth, with the share of capacity generated by new gasification processes increasing gradually. According to statistics from the China Nitrogen Fertilizer Industry Association, in 2018 China’s methanol production capacity was 84.32 million tons per year, representing a 1.0% increase on a year-on-year basis. Among them, the methanol production capacity based on coal as a raw material reached 62.36 million tons per year, accounting for 74% of the total production capacity, an increase of 2.2% on a year-on-year basis. There are 73 enterprises in coal-based facilities that utilize advanced gasification technology, with a production capacity of 49.97 million tons per year, accounting for 59.3% of the total capacity. Meanwhile, with the withdrawal of capacity for ammonia production via intermittent gasification, the capacity for polyol production dropped to 8.87 million tons per year in 2018, a decrease of 21.3% on a year-on-year basis; new capacity for monolcohol production amounted to 4.4 million tons per year, bringing the total monolcohol production capacity to 75.45 million tons per year, an increase of 4.5% on a year-on-year basis. The trend toward larger-scale methanol production facilities is accelerating, with high-quality production capacity continuing to increase. The restructuring of the industry has entered a new phase, and the industry’s competitiveness is steadily improving. 　　Industry performance has improved significantly. Following its turn from loss to profit in 2017, China’s nitrogen fertilizer industry achieved its best performance in nearly a decade in 2018. **According to data from the Bureau of Statistics, in 2018 the nitrogen fertilizer industry’s main business revenue amounted to 210.76 billion yuan, representing a year-on-year increase of 12.9%. The total profit for the entire industry was 10.55 billion yuan, with a year-on-year increase of 471.4%. Despite the significant fluctuations in China’s methanol market in 2018, the industry as a whole maintained good profitability, with the average ex-plant price reaching 2,813 yuan per ton, an increase of 284 yuan per ton or 11.2% on a year-on-year basis.