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The shutdown of fixed-bed units in Henan triggers a chain reaction Author/Source: Sinochem News Network Date: 2021-03-03 Clicks: 11 Recently, some key nitrogen fertilizer manufacturers in Henan Province reported to the China Chemical Industry News that after these companies were forced to shut down their fixed-bed batch gasification units due to policy requirements, the downstream facilities connected to them also stopped operating. As a result, fertilizer production is facing issues such as shortages of raw materials and increased transportation costs. With the peak season for spring plowing now here, regional supply shortages have led to a rapid rise in local fertilizer prices, increasing the costs for farmers growing crops. Companies are hoping that measures will be introduced at the **level as soon as possible to address the chain reactions resulting from the shutdown of fixed-bed units. According to Su Dong, executive vice president of the Henan Petroleum and Chemical Industry Association, in accordance with the requirements of the \"Implementation Plan for Assessing the Work of Phasing Out Backward Production Capacities in Henan Province,\" by the end of December 2020, six key nitrogen fertilizer manufacturers in Henan had shut down 7 ammonia synthesis plants with a production capacity of less than 300,000 tons per year each; the total capacity thus phased out was approximately 1.35 million tons per year. Among them, Henan Xinlianxin Chemical Industry Group Co., Ltd. has shut down two fixed-bed units one after another. At present, the daily urea production capacity of its Xinxiang facility is 4,000 tons, which is 1,800 tons less than before the elimination of those fixed-bed units, representing a reduction of 31%. The 2 ammonia synthesis units and 2 urea production units of Anyang Chemical Industry Group Company were shut down in full last September, resulting in a decrease in the annual production capacity of ammonia and urea by 315,000 tons and 470,000 tons respectively. The shutdown of 3 companies under Henan Jinshan Chemical Group has reduced the annual production capacity of synthetic ammonia by 600,000 tons. “After the shutdown of the fixed-bed units in nitrogen fertilizer plants, Henan Province’s annual fertilizer production capacity will decrease by more than 2.5 million tons, leading to regional shortages of fertilizers, rapid price increases, and an increased burden on farmers in terms of farming costs. It is expected that during this year’s spring plowing season, the overall supply and demand in Henan’s fertilizer market will be in a tight balance, with prices remaining high. ”Su Dong said. A responsible official from the Heart-to-Heart Marketing Service Center said that after the implementation of the fixed-bed shutdown policy in Henan Province, the annual production capacity of synthetic ammonia, urea, and ammonium chloride in the province decreased by 1.46 million tons, 1 million tons, and 1.7 million tons respectively, resulting in a shortage of nitrogen-based fertilizers in the region. At the same time, due to the concentrated use of fertilizer for spring plowing and low levels of inventory at the retail stage, coupled with rising expectations for grain prices that led to a surge in international urea prices, the local ex-plant price of urea rose by 440 yuan per ton on a year-on-year basis by early February, reaching 2,100 yuan per ton. A relevant official from Anhua Group also mentioned that the widespread shutdowns of fertilizer-producing enterprises have led to a tight supply in the nitrogen fertilizer market. According to the Ministry of Agriculture and Rural Affairs, the demand for nitrogen fertilizer during this year’s spring plowing season is expected to be 7.97 million tons (in terms of pure nitrogen), representing a 10.7% increase compared to the previous year. At the same time, demand for products from the domestic nitrogen fertilizer industry is strong, and with an increase in foreign trade orders, many wood-based panel manufacturers did not halt production during the Spring Festival; it is expected that industrial consumption will also increase by 4 million tons on a year-on-year basis. On the one hand, there is demand in the spring plowing market; on the other hand, companies are required by policies to shut down relevant facilities. How to resolve this contradiction has become an issue of concern for nitrogen fertilizer manufacturers in Henan. “After the fixed-bed unit was taken out of service, we achieved optimal performance from the water-coal slurry unit through technical innovations and modifications to the gas nozzles, and we actively promoted the sales of high-efficiency urea as well as urea granules and solutions for use in vehicles. ”A representative from Xinlianxin said that in the next step, with the commissioning of facilities in other locations, Xinlianxin will ensure a continuous and stable supply of fertilizers, thereby contributing more fertilizers to increasing grain production and yields. The person in charge of Anhua Group said that after the shutdown of the company’s fixed-bed gas generation unit, the urea and ethylene glycol production units were also shut down due to a lack of feed gas. To this end, the company will vigorously advance the upgrading of its raw material supply chain, conduct research on projects related to industries such as ammonia, diversified fertilizers, organic amines, and ethylene glycol, and work to repurpose existing idle production facilities. In addition, the Henan Petrochemical Association and representatives of some enterprises suggested that **relevant departments, taking into account issues such as reduced production capacity, rising fertilizer prices, and increased burdens on farmers following the shutdown of plants, should reconsider and reassess fixed-bed batch gasification furnaces as well as synthetic ammonia production technologies with an annual capacity of 300,000 tons or less. They recommended drawing on the experience of Hebei Dongguang Chemical Company in implementing upgrades using fixed-bed batch gasification technology, and encouraging nitrogen fertilizer manufacturers in Henan to carry out similar upgrades.