The Russian Ukrainian conflict may have an impact on the supply of chemical fertilizer in Russia: the escalation of the Russian Ukrainian conflict and the possible sanctions against Russia by Western governments may have a wide impact on the supply of chemical fertilizer in the global market. Russia is one of the important fertilizer exporters in the world. According to Argus, Russia exported 11.83 million tons of potassium fertilizer in 2021, accounting for 27% of the global export market, ranking third; The export volume of phosphate fertilizer is 4.05 million tons, accounting for 14% of the global export market, ranking fourth; Russia is the world’s largest exporter of ammonium nitrate, urea, compound fertilizer and ammonia. Once Russia’s fertilizer exports are disturbed, it will have a certain impact on global supply.
The contract price of potassium fertilizer is higher than expected, and the global supply tension will intensify: since 2020, the global Shenzhen Agricultural Products Group Co.Ltd(000061) price has risen, and the planting enthusiasm has increased, driving the demand for chemical fertilizer. With the gradual expansion of spring ploughing and fertilizer preparation, China’s peak demand season is coming. According to Baichuan, the price of potash fertilizer has been rising all the way since the middle of 2020. At present, with reference to the mainstream quotation of 62%, the quotation of Russian White potassium port is about 4400-4450 yuan / ton. Recently, the Chinese negotiating team and the potash company canpotex reached an agreement on the 2022 potash fertilizer contract. The price is 590 US dollars / ton CFR, which is higher than expected compared with the large contract price of 247 US dollars / ton CFR last year, forming a certain support for the market price of potash fertilizer. Meanwhile, affected by the US sanctions against Belarus, Lithuania officially banned the transit of Belarus potash fertilizer from February 1. According to Baichuan, Belarusian potash fertilizer accounts for about 20% of global potash fertilizer exports. If there is still no ideal transportation scheme in the later stage, there will be some risks to the global potash fertilizer supply. In 2021, China’s imports of potash fertilizer from Russia and Belarus accounted for 30% and 23% respectively. The conflict between Russia and Ukraine may affect China’s potash fertilizer supply.
The internal and external demand for phosphate fertilizer is good, and the phosphorus chemical industry chain is booming: according to Baichuan, at present, the mainstream reference quotation of 55% powdered monoammonium in Hubei is 3000-3100 yuan / ton, the mainstream ex factory quotation of 64% diammonium in Hubei is 3550-3590 yuan / ton, which remains at a high level, and the prices of overseas monoammonium phosphate and diammonium phosphate (Morocco FOB) are also maintained at a high level of 835-840 dollars / ton and 880-915 dollars / ton. The time of the greatest pressure on phosphate fertilizer inventory has passed, and the price remains strong. With the arrival of spring ploughing and the opening of exports in the second quarter, the domestic and foreign demand is improving, and the price of phosphate fertilizer has room for upward growth. At the same time, the price of phosphate rock at the raw material end has reached an all-time high, the cost support is strong, and the demand for new energy is expected to drive the phosphorus chemical industry chain. It is optimistic that the prosperity of the phosphorus industry chain will continue.
Investment suggestion: be optimistic about the market of agrochemical sector. It is suggested to pay attention to Qingdao East Steel Tower Stock Co.Ltd(002545) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qinghai Salt Lake Industry Co.Ltd(000792) of potassium fertilizer and Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) of phosphorus fertilizer.
Risk warning: the demand is less than expected, the price of raw materials fluctuates, etc.
