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Fertilizer companies also need to be vigilant in the face of market changes. Date: March 16, 2009. Reason: During the period of preparation for spring plowing, with the implementation of various policies aimed at supporting and benefiting farmers, demand for fertilizers has increased, leading to a rise in prices. The fertilizer industry is likely to be the first in this sector to emerge from the downturn. On February 27, our newspaper reported on this in Section 3 under the title “Fei City Presents a Picture of Stable Prices in the South and Rising Prices in the North for Spring Plowing”. Recently, the domestic fertilizer market has reversed its previous trend of continuous decline, experiencing a period of rising both in volume and prices; many companies have seen a satisfactory situation characterized by strong production and sales performance. However, some fertilizer companies told reporters that they should not be overly optimistic about the current market situation, and must always be prepared to cope with market fluctuations. Xue Sanxing, head of the Sales and Marketing Department at Shaanxi Weihe Coal Chemical Group Co., Ltd., said that this improvement in market conditions is mainly due to the peak season for fertilizer use during spring plowing, coupled with limited existing stockpiles of fertilizers in the market. In addition, in accordance with the relevant regulations of the **fertilizer stockholding system**, inspections will be conducted at the end of March on the amount of fertilizer stored by companies designated to hold such fertilizer. Previously, as these companies were unsure about the future prospects for fertilizers, they preferred to wait and hold onto their cash; now, in order to meet their stockholding targets, they are entering the market to make purchases, which has also contributed to the strong demand for fertilizer products. Xue Sanxing warned that, based on current raw material prices and the ex-factory prices of fertilizers, fertilizer manufacturers are already making slight profits, which has boosted their enthusiasm for production. Many companies that had reduced or stopped production in the past are now restarting operations or operating at full capacity, which will inevitably lead to a rapid increase in fertilizer supply in the short term, potentially resulting in an oversupply in the market once again. Therefore, this market trend will not last long and may end by the end of March. Liu Xianchen, General Manager of the sales department at Hubei Huangmailing Phosphorus Chemical Co., Ltd., and Wang Chengyong, General Manager of the sales department at Shandong Shikefeng Chemical Co., Ltd., expressed similar views. The three provinces in the Northeast, as well as regions in the Northwest such as Inner Mongolia, Gansu, and Xinjiang, are the areas with the highest consumption of compound fertilizers in spring. In particular, the consumption of compound fertilizers in the Northeast region and the Jiaodong area of Shandong accounts for 50% of the country’s total consumption during that period. Since spring sowing in the three northeastern provinces generally begins in early April, the preparation of fertilizers usually takes place 7 to 10 days earlier, that is, it is completed by mid-to-late March, with the process ending in early April. This also means the end of the peak sales season for fertilizer companies. In contrast, Hou Yi, the deputy head of the marketing department at Shanxi Fengxi Fertilizer (Group) Co., Ltd., is more optimistic. He believes that this upward trend in fertilizer prices may continue until the first or middle part of April, or even longer. This is because the rectification of coal mines in Shanxi Province has led to a shortage of raw materials for fertilizer manufacturers that rely on coal, causing more such companies to reduce production or cease operations; as a result, the output and supply of fertilizers are far lower than expected. At the same time, insufficient natural gas supply has also affected the normal production of fertilizer manufacturers that use gas as a raw material. Well-known domestic ammonia fertilizer manufacturers such as Zhongyuan Dahuahua, Cangzhou Dahuahua, Sichuan Meifeng, and Chitianhua have been able to maintain an operating rate of around 70% for their plants due to limited natural gas supply since the second half of last year. “Fertilizer prices may stop rising by the end of March and start to fall in the first half of April. ”He said. Based on these considerations, some fertilizer companies have adopted strategies of rapid sales and low inventory levels. Since the Spring Festival, Shaanxi Weihua Group has intensified its efforts in selling fertilizers; the average daily sales volume of fertilizers has risen from around 1,000 tons in February to over 1,500 tons at present. Given that the company still has tens of thousands of tons of fertilizer in stock, it plans to start increasing the load on the alcohol-ether production unit in the near future, while shutting down the fertilizer production unit completely for maintenance. Shikefeng Company and Huangmailing Phosphorus Chemical Group adjust the production capacity of their facilities flexibly in line with market demand, while ensuring zero inventory of fertilizers, in order to utilize as much of the inventory of expensive raw materials as possible and boost working capital. Shanxi Fengxi Fertilizer (Group) Co., Ltd. has adjusted the operating load of its facilities for different types of fertilizers in light of the current situation where products such as ammonium bicarbonate and urea are selling well, ammonium chloride is not selling as well, and the profits from compound fertilizers are minimal; it is making every effort to ensure that the facilities for producing ammonium bicarbonate and urea operate at full capacity. At the same time, keep inventory levels of fertilizers at a low level corresponding to the company’s daily production capacity, and step up efforts to collect payments in order to mitigate the risks posed by possible changes in the fertilizer market.