Urea high-level operation remains unresolved

Recently, urea prices have risen steadily due to factors such as rising production costs, insufficient channel resources, shutdowns and overhauls, and power cuts. During the Dragon Boat Festival, domestic urea as a whole was stable, and some companies in northern China still offered slightly higher prices. At present, the mainstream ex-factory price in Shandong is between RMB 2,200 and RMB 2,220 (t price, the same below); the quotation in Hebei is stable, with the mainstream price at RMB 2,200 to RMB 2,210; some enterprises in Henan still make up the low end of their quotation, and the mainstream ex-factory price is between RMB 2,200 and RMB 2,250. ; Anhui offer high stable, the mainstream ex-factory price in 2270 ~ 2300 yuan; Jiangsu market is stable, companies offer 2250 ~ 2300 yuan; Guangdong mainstream wholesale offer in 2320 ~ 2380 yuan; Guangxi mainstream wholesale offer in 2300 ~ 2350 yuan. Most companies believe that urea prices will remain high in the short term, but after all, the urea production capacity will be in excess. Once the supply is restored, the price may fall immediately. However, it is unlikely that prices will fall sharply because of high costs. This is the information that the reporter obtained from the recent high-level forum on nitrogen fertilizer industry development and the 2011 industry work conference.

Ling Xiaodong, chief engineer of Yuntianhua Group, believes that the current increase in urea prices is driven by many factors. On the one hand, the tight supply of coal and natural gas led to the lack of start-up load for some companies, the decline in supply of urea, and the sudden outburst of market demand. On the other hand, raw material costs rose (such as the price of lump coal in coal-head enterprises has risen to 1,700 yuan, and pulverized coal has also risen. To 1100 yuan), bank loan interest rates, labor costs, rising logistics costs, etc., led to an increase in the overall operating costs of society, and thus promote the urea production enterprises raised the ex-factory price. It is understood that due to the shortage of natural gas, Sichuan Chemical Holdings Co., Ltd. currently has a urea operating rate of around 60%. Chen Xiaojun, general manager of the company, said: "The recent international urea market continues to rise, sending confidence to the domestic market, to a certain extent, pulled up the domestic market price."

Zhang Rong, secretary-general of the China Nitrogen Fertilizer Industry Association, said: "In addition to the cost support and international market pull, this year's price increase is not prosperous this year, and the market is in a predicament in the early stage, resulting in low stocks. With the slow recovery of demand, society gradually recognizes The reality of low inventory levels is bound to be a round of price outbreaks. In the first four months of this year, there were 381 nitrogen fertilizer companies reporting statistics from the Statistics Bureau, compared with 467 in the same period last year. The difference between the two is not a bad report, but a poor one. Can't drive at all."

The electricity shortages limit the normal production of nitrogen fertilizer companies, releasing a rising signal to the urea market, which was already in tight supply. Xia Yingyu, executive vice president of the Anhui Chemical Fertilizer Industry Association, told the reporter: “The power supply situation in Anhui Province is very severe. Most of the fertilizer companies’ power consumption has been reduced to 1/2 of normal production, and some have fallen to 1/3. The security load is not enough.Fortunately, the National Development and Reform Commission issued the “Orderly Power Management Measures” to require the power supply department to give priority to the protection of fertilizer production. At present, the Anhui Chemical Fertilizer Industry Association is organizing enterprises to take reasonable arrangements for maintenance, according to the local power supply effective peaks and valleys. Time-shifted production and other measures actively responded to the power shortage."

The monitoring data of China Nitrogen Fertilizer Industry Association indicated that the production of urea enterprises was generally in a depressed state from January to April this year, plus factors such as stopage maintenance and power cuts, the operating rate was about 70%, and the market supply and social urea stocks remained at a low level. . Driven by the recovery of demand, in the last week of May, the urea utilization rate increased to 75.2%.

Zhang Zhaozhen, chairman of Anhui Jinneng Zhongneng Chemical Industry Co., Ltd., believes that the lack of light storage in winter last year was also one of the reasons for the price increase of urea. He predicts that the rise in urea prices will continue until July and will fall after August. It is understood that although the current price of urea is high, confidence in production and distribution companies is not enough. Some of the company's production will follow the market, and some circulation companies will only dare to have a small amount of inventory. Most people believe that once the supply increases, the price of urea will follow and it will follow. Although the nitrogen fertilizer export window period is approaching, the company’s response is not very fierce and it has no choice but to wait for the result of taxation on the export base price. If the export is not smooth, it will certainly impact on the domestic market.

Yang Chunsheng, chairman of the Shandong Chemical Fertilizer Industry Association, said that at present, urea prices are high and corporate profits are not high. The price increase of urea is mainly driven by cost, but if the price is accepted by the market, it can only be achieved by means of depressing supply. This is a bloody balance and is not good for the country, the enterprise, and the farmers.

For the current complicated situation, Li Shousheng, executive vice president of the China Petroleum and Chemical Industry Federation and chairman of the China Nitrogen Fertilizer Industry Association, suggested that the company should pay attention to the following four issues in the second half of the year: The first is the power shortage. State Grid Corporation predicts that the biggest power shortage this summer will reach about 30 million kilowatts. Coal prices are difficult to straighten out, leading to power cuts in the off-season. Nitrogen fertilizer companies should strengthen communication with power companies to ensure that electricity production can maintain normal production. Followed by drought and floods. Many regions in China have suffered from continuous drought, and floods and floods have occurred in some parts of the country. Governments and farmers at all levels will pay special attention to the autumn planting of autumn seeds. Nitrogen fertilizer companies must actively organize the preparation of autumn fertilizers. Again, coal prices. This year's coal prices have been operating at high levels and there are likely to be higher prices in the future. Finally, we must pay special attention to production safety. At present, fertilizer companies have difficulties in operating and have a meager profit. Once a safety accident occurs, it will undoubtedly worsen the situation.