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The nitrogen fertilizer industry turned loss-making in the first quarter. Author/Source: Sinochem New Network. Date: May 13, 2020. Clicks: 86. Recently, the meeting of the Market and Trade Committee of the China Nitrogen Fertilizer Industry Association for 2020 was held via video conference, organized by the association itself. The meeting concluded that agricultural demand for nitrogen fertilizers in the first quarter of this year was significantly better than last year, but due to the situation where the prices of nitrogen fertilizer products were lower than their costs, the nitrogen fertilizer industry shifted from profitability to losses. In the first quarter, the entire industry made efforts to produce nitrogen fertilizers, successfully fulfilling the task of ensuring an adequate supply and stabilizing prices of such fertilizers for spring plowing. According to statistics from the China Nitrogen Fertilizer Industry Association, from January to March, the national production of nitrogen fertilizers amounted to 9.772 million tons, a 4.8% increase on a year-on-year basis; the production of urea was 13.4 million tons in terms of physical volume, representing an 8.8% increase compared to the previous year. Estimates show that China’s apparent consumption of nitrogen fertilizers increased by 8.1% on a year-on-year basis in the first quarter, with urea seeing a 14.6% increase; however, prices dropped by 10.5% on a year-on-year basis. In the first quarter, agricultural demand for nitrogen fertilizers was significantly stronger than last year; however, due to the situation where the prices of nitrogen fertilizer products were lower than their costs, the nitrogen fertilizer industry shifted from profitability to losses. According to statistics, the total profit of the nitrogen fertilizer industry from January to March 2020 was -0.75 billion yuan. Regarding the situation in the nitrogen fertilizer market in the second quarter, experts say that the favorable factors include: first, strong demand for nitrogen fertilizers in agriculture; second, a reduction in the level of epidemic control measures in China, with the national economy gradually recovering and industrial demand expected to increase; third, the effects of a series of economic stimulus policies will become apparent over time; fourth, due to the impact of the pandemic, production in major nitrogen fertilizer-producing countries such as India has declined, leading to an increase in import demand; fifth, the cost and price of urea in China have dropped, enhancing its international competitiveness; sixth, inventory levels in some regions are low; seventh, the commissioning of new production capacity in China has been delayed; eighth, some companies are carrying out major maintenance works. Disadvantages include the fact that the epidemic abroad has not yet been brought under control, meaning that the export situation for chemical products is unlikely to improve in the short term; energy prices both internationally and domestically remain low, resulting in low prices for nitrogen fertilizers and chemical products; and with road tolls being reinstated, freight costs will increase. The meeting called on nitrogen fertilizer manufacturers to strengthen communication and cooperation with downstream users and distribution companies, to control the pace of sales based on demand, and to maintain reasonable inventory levels. It is necessary to ensure a stable supply of fertilizers during the summer, while also taking into account the capacity of distribution companies and end-users to avoid sharp price fluctuations.