Thread Content
Can the fertilizer industry emerge from its downturn? Author/Source: China Fertilizer Network Date: 2019-11-20 Clicks: 85 On November 17, the Market Analysis Forum of the 20th Domestic High-Concentration Phosphorus Fertilizer Production and Sales Conference was held in Qingdao, where experts discussed the trends in the fertilizer market for this winter and next spring, as well as throughout 2020. Andrea Valentini, lead analyst for Argus’ fertilizer consulting in the Asia-Pacific region, analyzed the trends in the global nitrogen, phosphorus, and potassium markets. First, the global nitrogen fertilizer market is generally characterized by an oversupply. It is expected that between 2020 and 2024, the new export-oriented production capacity will exceed the demand for growth, and the market may turn weak. China has achieved significant results in reducing overcapacity, and it is expected that there will be no further closures. Second, there are significant regional differences in the global phosphate fertilizer market. China has been a net exporter of diammonium phosphate since 2007, but its phosphate fertilizer production still faces challenges: it has become more difficult to obtain permits for phosphorus ore mining ； Pressure to protect the environment remains unchanged ； The export market for diammonium is highly competitive. Thirdly, regarding potassium chloride, due to the increase in new projects, the surplus in the potassium fertilizer market will exceed the growth in demand in the future. Wang Bei, deputy general manager of Sinograin Group Holding Co., Ltd., said that in 2018, the global production of potash fertilizers was 68.68 million tons, while the global trade volume of such fertilizers was 53.49 million tons. Brazil, China, India, and Southeast Asia accounted for 60% of all global imports of potash fertilizers. In 2019, the Chinese potash fertilizer market saw high inventory levels and falling prices. Wang Bei said that this might be the darkest period for the potash fertilizer industry at present, and the negotiations regarding imported potash fertilizers in 2020, along with the macroeconomic situation, deserve attention. Regarding the phosphate fertilizer market, Jiang Hua, chairman of Wengfu International Trade Co., Ltd. under Guizhou Phosphorus Chemical Group, believes that the sharp decline in the price of diammonium phosphate in China in 2019 can be attributed to four main factors: first, supply and demand ； The second is raw material costs ； Third, the weather has been abnormal in many areas ； Fourth is the “short-selling behavior” of international traders. Jiang Hua said that it is expected that reduced production of phosphoric ammonium fertilizers will become the norm in the future, leading to a decline in exports. Among them, India’s imports decreased by about 1.45 million tons, Pakistan’s by 600,000 tons, and Vietnam’s by 110,000 tons. Regarding the nitrogen fertilizer market, Mao Guobin, deputy general manager of Hubei Sanning Chemical Co., Ltd., believes that the urea market exhibits three characteristics: first, the prices change rapidly and frequently ； Second, the magnitude is large ； Third, the off-season period is long; it has been declining since May until now, lasting nearly half a year. The total annual urea production is expected to reach 54 million tons, representing a net increase of around 2 million tons. The operation rate in November and December this year is likely to be higher than that in the same period last year. Mao Guobin said that international production capacity will increase significantly in the future, and the outlook for urea exports in the medium to long term is not favorable. Some of China’s production capacities lack international competitiveness, so industrial upgrading and phasing out of outdated facilities will continue. Regarding the compound fertilizer market, Li Yuxiao, head of the marketing department at Jinzhengda Group, said that from January to July 2019, the supply and demand in China’s fertilizer market remained stable. Although consumption saw a slight increase, the growth rate was limited. The number of companies suffering losses in this industry increased, while corporate costs remained high and profits stayed low. As a result, the process of restructuring in the compound fertilizer industry continued to accelerate. ~