A few days ago, the Fertilizer Quality Monitoring Office of the National Agricultural Technology Extension Service Center pointed out that it is expected that the fertilizer supply will be tight during the autumn and winter planting period, and it will continue to operate at a high level in the later period. The article analyzes that there are 4 major unfavorable factors in the autumn and winter fertilizer market.
1. The tight price of potash fertilizer affects stocking and fertilizer use
my country’s potash fertilizer imports are highly dependent. The contract price of potash fertilizer imports signed in February this year is US$247/ton, while the current CIF price of Belarusian potassium chloride exports to Brazil is US$680/ton and exports to Southeast Asia is US$450/ton. my country has become the price. In depressions, international suppliers have delayed shipments, leading to an overall downward trend in my country's potassium chloride port inventory this year. It has fallen to less than 2.2 million tons since the end of May, while it remained at about 2.85 million tons in the same period last year. In addition, the European Union imposed sanctions on Belarusian potash exports and restricted Belarusian potash exports via the Port of Klaipeda, Lithuania. The market situation in the later period is not optimistic.
According to monitoring, domestic potash fertilizer prices have risen by 48.9% since the beginning of June. High-priced potash fertilizers have delayed the stocking of distributors and compound fertilizer companies during the autumn and winter planting period to a certain extent.
2. The cost is too high, the price is upside down, and the stock of compound fertilizer is tight
Compound fertilizer companies mostly produce according to orders, and the high price of raw materials makes companies reduce their reserves to resist risks caused by large fluctuations in raw materials. At present, there has been an upside-down phenomenon where order prices are lower than production costs, and some companies have indicated that they may postpone fertilizer reserves. If the concentration is postponed, it is necessary to be wary of the combination of factors such as tight supply of natural gas and other energy sources and centralized procurement of raw materials, which will continue to push up the price of chemical fertilizers. The tight price of potash fertilizer required by compound fertilizer companies for material preparation is high, which has a greater impact on fully fed processing companies and small and medium-sized enterprises. The late stocking up in the early stage may lag the supply of fertilizers in areas where the autumn and winter planting period is late.
3. Environmental pressure and coal indicators affect the supply chain structure
As the province with the highest urea output, due to environmental protection and coal restrictions, the production capacity of Inner Mongolia has decreased significantly, which has led to a decrease in nearby purchases from the northeastern region of the “large users of fertilizers”. Phosphate fertilizer companies in southwestern China have difficulty purchasing coal, so they buy from Xinjiang and other places, and they cannot form long-term fixed contracts.
Fourth, some companies switch to production in pursuit of higher profits
At present, the average ex-factory price of synthetic ammonia for nitrogen fertilizer-related products is 4,319 yuan/ton, up 79.9% year-on-year; the average ex-factory price of melamine is 13,152 yuan/ton, up 157.9% year-on-year, and the increase far exceeds that of nitrogen fertilizers. Some nitrogen fertilizer companies choose to switch production to reduce nitrogen fertilizer output. The sulphur resources required for the production of phosphate compound fertilizers are more than 2/3 dependent on foreign sources. The average CIF price of sulphur in August was US$215/ton, a year-on-year increase of 198.6%. The phosphoric acid produced from sulfur (sulfuric acid) is more inclined to new energy batteries with high added value, which also squeezes the raw material space for phosphate compound fertilizer production.
Development and Reform Commission held a meeting to ensure the supply of fertilizers and stabilize prices
On September 6th, the National Development and Reform Commission organized the first meeting of the working mechanism for ensuring the supply and stabilization of fertilizer prices. Since the beginning of this year, my country's fertilizer supply has decreased slightly, and prices have continued to run at a high level, reaching the highest level in the past decade. The meeting analyzed and judged the supply, demand and price situation of the fertilizer market at present and for a period of time in the future, and deployed relevant control work. The meeting agreed that it is necessary to combine long and shortcomings, comprehensively implement policies, and coordinate with the division of labor, and actively take effective measures to ensure the supply of chemical fertilizers and stabilize prices, and protect farmers' enthusiasm for growing grain.
The world's largest comprehensive nitrogen fertilizer plant announced force majeure
The spot price of nitrogen fertilizer on the U.S. Gulf Coast soared further this week to its highest level in nearly a decade. According to reports, the global nitrogen fertilizer and phosphate fertilizer product giant CF Industries, located in the production park in Donaldsonville County, Louisiana, USA, closed its large-scale complex before Hurricane Ida approached. According to data from Green Markets, due to the force majeure caused by the hurricane, the spot price of urea nitrogen fertilizer in the U.S. Gulf of Mexico has soared by 16.5%.
Before Hurricane Ida swept across the United States, due to the soaring commodity prices, farmers expanded crop production, and the demand for chemical fertilizers had also soared. In a recent commodity report released by Rabobank, farmers are expanding their planting areas and applying more fertilizers to their fields to increase crop yields. ABN AMRO warned that higher prices may inhibit the purchase of fertilizers.
Source: Mobile Public Account
