Excess urea production capacity has drawn **significant attention
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Reporters learned from the meeting of the presidents of the Anhui Fertilizer Industry Association held in Linquan County, Anhui Province, on that day, that the surplus capacity in urea production has drawn **significant attention**; relevant departments such as the National Development and Reform Commission and the Ministry of Industry and Information Technology are currently seeking industry opinions on how to address this issue of excess capacity. According to statistics, by the end of this year, the total urea production capacity across the country will reach 71.3 million tons, and by 2015–2017, this figure is expected to rise to over 90 million tons. Meanwhile, it is predicted that by the end of the 12th Five-Year Plan period, the national demand for urea will be around 60 million tons. After taking into account factors such as urea exports and the withdrawal of some production capacity, the excess urea production capacity in the future could reach 20 million tons. The urea industry will face severe challenges related to supply-demand imbalance during the 12th Five-Year Plan period and for some time thereafter. Li Chaodong, director of the Office of Experts in Heavy and Chemical Industry in Anhui Province, analyzed that the main reasons for the excessive expansion of urea production capacity in recent years include: first, the high maturity of this industry, meaning that there are no technical barriers to companies launching urea production projects ； Secondly, China is a major coal-producing country, providing abundant resources for the urea industry ； Third, agricultural development drives up the demand for urea ； Fourth, industrial regulation policies are imperfect ； Fifth, information asymmetry in the industry has led to the reckless launch of some urea projects. He believes that curbing excess urea production capacity requires **the combined efforts of the market. Xia Yingbiao, executive vice president of the Anhui Province Fertilizer Industry Association, said that in the face of the severe problem of overcapacity in urea production, the fertilizer industry in Anhui Province has adopted a development strategy that emphasizes \"focusing on fertilizers, moving beyond just fertilizers, combining fertilizer production with other activities, and pursuing diversified operations.\" Efforts are being made to shift from producing basic chemical products to those that are more differentiated and refined; by the end of the 12th Five-Year Plan period, the proportion of high-value chemical products in the province’s fertilizer industry is expected to exceed 45%.
There is an overcapacity in urea production – is it the designed capacity or the actual production capacity? The urea market is affected by seasons, as farmers do not apply fertilizers to the fields every day regardless of the season. Furthermore, urea production plants all have a considerable amount of synthetic ammonia on hand, and synthetic ammonia is a basic chemical raw material; it is therefore possible to control or restrict urea production in order to produce other nitrogen-containing chemical compounds such as nitric acid, *ao acid an, nitrocompounds, and amino compounds. By simply controlling or adjusting the supply to the market and the product structure, there will be no excessive surplus of urea. Don’t forget that China is a major country in the production and use of urea.
What is in excess are high-energy-consuming production capacities; advanced production capacities are not in excess. The growing production capacities at present will displace the former
Fertilizers should develop in a diversified manner. In the long run, compound fertilizers and liquid fertilizers are more popular. Compound fertilizers contain a relatively comprehensive range of nutrients. Liquid fertilizers are easily absorbed by plants. Furthermore, the current trend is the replacement of high-energy-consuming low-nitrogen fertilizers with low-energy-consuming high-nitrogen fertilizers.
At Haiyoumen, how many units are there in the urea production project under construction? The Zhongmei Tukou project is building two units capable of producing 800,000 tons of urea each. What will the production capacity be in 2 years? How much is the underdeveloped capacity? Is it the ammonia synthesis technology that is outdated, or is it the urea technology?
The biggest one right now seems to be Hainan Fukushima
Those that have achieved an annual production of 800,000 tons through driving operations include Tarim Petrochemical and China Coal Jinxin? There are a few more sets under construction.
This post was last edited by Xieshui on 2012-12-27 at 12:39. Many medium/small nitrogen fertilizer plants in the south (with production capacities of 20,000–40,000 tons per year) have been shut down intermittently, and there’s no news either about Shanghai Chuan
The actual cost of urea is closely related to the ammonia synthesis plant. In the ammonia production sections of small urea plants, fixed-bed batch gas generation is mostly used; this approach requires high-quality raw coal. Due to their reliance on such raw materials, many of these plants were acquired by coal industry groups in Shanxi that have access to raw coal, under very stringent conditions. However, the anthracite in Shanxi will also run out eventually, and at that time, constraints related to raw materials will still exist; it is therefore best for the small urea plants in the south to shut down or switch to other production activities as soon as possible. With the involvement of state-owned enterprises such as China National Coal Group and State Power Investment Corporation that possess resources, as well as local enterprises or private firms with coal resources, large-scale coal chemical plants have been established in resource-rich provinces such as Xinjiang, Inner Mongolia, and northern Shaanxi. A significant portion of the output from these plants is urea, which means competition will inevitably intensify. Therefore, it is necessary to eliminate outdated production capacities by taking advantage of resource advantages.
I think that’s what it means as well; companies with some strength at present should seek to transform as early as possible