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This post was last edited by penghh1985 on 2016-3-12 at 14:49. National nitrogen fertilizers: ample supply and low prices. On March 1–2, a meeting to analyze the spring market situation for nitrogen fertilizers in 2016 was held in Xiamen. Representatives from CNPC’s Northwest Company, Beifang Huajin, Chongqing Jiuhe, and CNOOC presented reports on the supply conditions and price trends of nitrogen fertilizers in the northwest, northeast, southwest, and south China regions during the spring season. Overall, nitrogen fertilizer supply is generally sufficient across various regions, and prices are expected to fluctuate at low levels. Northwest: Sufficient urea supply As of now, there are 30 urea production enterprises in the Northwest region, with a total production capacity of 19.33 million tons. The annual demand for urea in this region is 3.33 million tons. The sales of urea for spring planting in the northwestern region will continue until early April, with top-dressing taking place again from May to July. Based on past sales patterns, the period from March to July is the peak time for fertilizer use, with consumption accounting for about 90% of the annual total. The annual demand for urea in the Xinjiang market is around 2 million tons; about 30% of this is used for spring sowing from March to April, while 70% is used for top-dressing from May to July. The annual urea demand in the Gansu market is around 850,000 tons; about 20% of this is used for spring sowing in March, 60% is used for top-dressing in May and June, and 20% is used for autumn sowing in August and September. The annual urea demand in the Ningxia market is around 240,000 tons, with the amount of fertilizer used for spring planting and during the watering period in May accounting for over 80% of total sales. The annual urea demand in the Hetao region of Inner Mongolia is around 180,000 tons, with sales prior to the end of May accounting for over 85% of the total sales volume. The Qinghai market has an annual urea demand of 50,000 to 60,000 tons. The period during which fertilizer is used is short, with the amount of fertilizer used for spring planting accounting for over 95% of the total annual usage. At present, the Xinjiang regional market has been launched, and demand is gradually recovering ； Distributors in the Hedong area of Gansu begin preparing fertilizers for spring planting ； Prices in the Ningxia market saw a slight decline after the Spring Festival ； The current market price of urea in Bayannur, Inner Mongolia is 1,380–1,400 yuan per ton (the same unit is used thereafter). Northeast: A shortage in Jilin. The total area of arable land in the Northeast region is about 26.109 million hectares. The main crops include corn, rice, soybeans, etc.; cultivation takes place once a year, with planting in spring and harvesting in autumn, and the use of fertilizers occurs mainly from April to August. Heilongjiang has 210 million mu of arable land, with a nitrogen fertilizer market capacity of 2.1 million tons ； Jilin has 82.95 million mu of arable land, with a nitrogen fertilizer market capacity of 1.4 million tons ； Liaoning has 56.8 million mu of arable land, with a nitrogen fertilizer market capacity of 1.2 million tons. The three provinces combined account for 4.7 million tons. In 2015, there were 11 urea plants in operation in the Northeast region, with a total production capacity of 5.07 million tons. Of this, the production capacity for ordinary urea is 3.95 million tons, while that for large-grain urea is 1.12 million tons. The total urea demand in the Northeast region in 2016 was approximately 5 million tons, of which 3.3 million tons were for agricultural use and 1.7 million tons for industrial use. At present, the supply of ordinary urea in Liaoning and Heilongjiang is guaranteed, with about 200,000 tons of fertilizer coming from outside the province into Liaoning each year. There is a shortage of supply within Jilin Province, with a significant gap. After entering March, the demand for spring plowing in the Northeast region gradually increased, and with the resumption of operations by companies that produce compound fertilizers and rubber sheets downstream, there is a chance for urea prices to rise again. Southwest: Prices remain relatively stable. The Southwest region is an important exporter of urea in the country; by the end of 2015, its urea production capacity was 11.77 million tons. Among them, Guizhou has 2.74 million tons, Sichuan has 4.83 million tons, Yunnan has 2.27 million tons, and Chongqing has 1.93 million tons. 77% of the urea production capacity in the southwest region relies on natural gas as a raw material, while 23% uses coal. The annual demand for agricultural urea in the southwest region is approximately 5 million tons. In 2016, costs in the nitrogen fertilizer industry are likely to rise sharply. As environmental regulations become stricter, demand for urea for industrial use will increase, but due to the ongoing downturn in China’s coal industry, urea costs may fall further. The new low-cost coal-based production capacity will continue to put pressure on the gas-based urea market, and confidence in the industry remains low. It is expected that urea prices in the southwest region will remain relatively stable during the spring plowing fertilizer usage period in 2016. South China: Slight price fluctuations. Overall, demand for urea in the South China region is declining in spring, while supply remains ample. Hainan’s total demand for urea is approximately 150,000 tons. Agricultural demand is around 125,000 tons, mainly for rice cultivation ； The industrial demand is around 25,000 tons, mainly absorbed by plywood factories. Hainan urea is mainly in large granules, with regular urea serving as a supplement. Fertilizer use for crops from March to May is concentrated on crops such as rice, sugarcane, and rubber. It is reported that Sinochem Chemical is currently operating at full capacity to meet market demands. The total demand for urea in Guangdong is approximately 1.5 million tons. The agricultural demand is around 1 million tons, mainly for use in rice cultivation ； The industrial demand is around 450,000 tons, mainly used in compound fertilizers, BB fertilizers, adhesives for composite panels, flue gas denitration in power plants, and wastewater treatment. The total demand for urea in Guangxi is approximately 1.7 million tons. Of this, the agricultural demand is around 1.2 million tons, while the industrial demand is 450,000 tons. In Guangdong and Guangxi, fertilizer use from March to May is concentrated on rice, fruit trees, sugarcane, etc. Since the Spring Festival, urea prices in the Guangdong and Guangxi markets have fluctuated slightly, with the prevailing price around 1,350 yuan. As spring fertilization begins and demand increases, prices are expected to fluctuate at low levels, influenced by high inventory levels, high operating rates of enterprises in the region, as well as numerous import channels from outside the region that result in fast delivery speeds and large volumes of supplies. Fujian’s total urea demand is around 770,000 tons, of which 370,000 tons are for agricultural use and 400,000 tons for industrial use. Demand for urea in Fujian is expected to increase significantly in March and April, but with the rapid arrival of urea from other regions, the market supply remains ample, resulting in prices fluctuating only slightly.