Is the significant drop in natural gas prices beneficial for synthetic ammonia?
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CCTV Finance (Reporter: Pingfan) – Today, the National Development and Reform Commission issued a notice stating that it has decided to reduce the prices of natural gas at distribution stations for non-residential users starting from November 20th, while further promoting the market-based determination of natural gas prices. There are two key aspects to this reform of natural gas prices for non-residential users. The first is to reduce the price at the distribution stations for non-residential use; starting from November 20, 2015, the maximum price at such distribution stations across various provinces was reduced by 700 yuan per thousand cubic meters, which translates to a reduction of 0.7 yuan per cubic meter. Zhou Dadi, Executive Vice President of the China Energy Research Society: The scale of this price adjustment is quite significant; it’s roughly one-third lower than the original price. For users, using clean coal and increasing its consumption represents very good news. Jing Chunmei, a researcher at the China Center for International Economic Exchanges: (At present,)** the amount subject to direct pricing is 600 billion. By reducing it by 0.7 yuan, an immediate reduction of 430 billion can be achieved. There is also some amount that is priced based on market forces; taking into account the impact of **direct pricing on market-based pricing, the total reduction in burdens for existing enterprises could reach 1000 billion.
I hope that implementation can be carried out swiftly in all regions.
It can basically be said that it saved all the ammonia synthesis plants using gas as a feedstock.
Raw material costs account for 70% of the total! ! The depreciation of those old-fashioned devices should have been completed by now! ! It’s a huge boon for those with an aggressive temperament! ! The tough times for Yuntianhua, Lutianhua, and Chuantianhua are coming to an end! ! It’s a pity that Sichuan Chemical has stopped production and is no longer in operation! ! ! ! !
These industries that rely on such gases have long since been modified due to raw material issues; otherwise, they wouldn’t have been able to survive! Moreover, although raw material costs have dropped, the issue of product saturation remains unresolved; this will instead encourage some companies to increase production further, ultimately affecting product sales.
Upstairs, the raw material gas brings a reduction of 0.7 yuan, which results in a direct cost cut of 630 yuan for you; but surely the price of ammonia won’t drop by 700 yuan as well. Even if it drops by three or four hundred, you’ll still be able to make some money.
Chitianhua has gone bankrupt – what should be done with Lutianhua’s coal-to-gas project?
**The policy has been introduced, but it will take some time to implement it in practice; it won’t happen that quickly… State-owned enterprises should benefit a lot from this! !
You’re all wrong; it’s not a matter of costs at the moment, but rather an excessive capacity. This isn’t a lifeline – it only delays death. Don’t say I’m pessimistic – current environmental and safety standards are higher; in the future, fertilizers should be directed toward Africa. Do the United States and Europe still need fertilizers? Only potassium fertilizer remains. Synthetic ammonia is akin to the current steel industry; natural gas-based synthetic ammonia is doomed to decline sooner or later. If you don’t believe it, just wait five years and see