In spring farming season, China's chemical fertilizer market is as hot as usual.
After the Spring Festival in 2022, the prices of various chemical fertilizers continue to rise strongly. Urea is known as the "barometer" of the fertilizer market, and its price increased by 54.38% compared with the same period last year. With the sharp rise of urea price, some practitioners have increased their risk awareness and are gradually cautious about the purchase of high price urea.
Executives of a large agrochemical enterprise in Shandong said in an interview with the reporter of China Business Daily that at this stage, the price rise of agrochemical products has a certain relationship with the complex and volatile situation in Russia and Ukraine, affecting the rise of prices in the international market. However, the industry has been slowly raising prices since last year, and the main reason for this is the rising price of raw material coal.
fertilizer prices rose strongly
On March 10, China's urea market continued to rise, with a range of 10 ~ 50 yuan / ton, and large particles rose above 3100 yuan / ton. The reference quotation for the mainstream ex factory transaction of small and medium-sized particles in Shandong is around 2890 ~ 2920 yuan / ton, and the large particles are 3100 yuan / ton. The main factory quotation of small and medium-sized particles in Henan is about 2850 ~ 2870 yuan / ton.
According to the latest data released by the China Agricultural Materials Association, the price of chemical fertilizer in China has continued to rise since August last year. After the Spring Festival this year, the prices of various chemical fertilizers continued to rise strongly. Compared with the same period last year, urea increased by 54.38%; The international price of diammonium phosphate has risen for 12 weeks. At present, the quotation has increased by 172.5 US dollars / ton compared with that before the festival, with a year-on-year increase of 88.74%. The price of diammonium phosphate of large enterprises in Southwest China has increased by 400 yuan / ton. The arrival quotation of diammonium phosphate in North China and Heilongjiang has increased by more than 10% compared with that before the festival, with a year-on-year increase of more than 40%.
In this regard, Xue Zhenyang, a researcher of Sinochem Puhua, analyzed to reporters the reasons for the rising price of chemical fertilizer recently: first, it is driven by the rising price of international chemical fertilizer market. Due to the global emphasis on food production, the increase of grain planting area and the increase of demand for chemical fertilizer, resulting in the rise of international chemical fertilizer prices. Second, the fertilizer preparation for spring ploughing in the downstream is in good condition, the winter storage market is steadily promoted, and the demand for chemical fertilizer rises periodically. With the support of just demand, the market has a strong willingness to support the price. Third, the raw materials for chemical fertilizer production are tight and the price is high, and the supporting role of cost is obvious. The important raw materials for fertilizer production are natural gas and coal. Recently, the prices of natural gas and coal have continued to rise slightly. The production of urea is limited due to environmental protection, the supply shrinks, and the price of urea remains strong. The rising cost of chemical fertilizer production drives up the market price of chemical fertilizer. Fourth, due to the tight global supply of chemical fertilizer, the import of chemical fertilizer continued to decline. The situation in Russia and Ukraine has escalated, the local export of potash fertilizer and other fertilizers has been affected, the outward transportation has been reduced, the cost has increased, and the price has risen sharply.
Urea is a kind of high concentration nitrogen fertilizer, which belongs to neutral quick acting fertilizer. It can also be used to produce a variety of compound fertilizers. It is known as the "barometer" of the fertilizer market. The upstream raw materials of urea production mainly include coal and natural gas, of which the proportion of urea produced by coal is still dominant.
Recently, driven by multiple factors outside China, the overall price of coal has increased significantly, and the prosperity of the sector has increased.
Relevant data show that as of March 8, the quotation of thermal coal in Qinhuangdao port was 121820 yuan / ton, with an increase of 14.77% on a weekly basis; On the same day, the price of Shanxi main coke coal depot in Jingtang Port increased by 305000 yuan / ton, with a weekly increase of 7.77%. As of March 7, the settlement price of coke futures closed at 377200 yuan / ton, up 9.24% on a weekly basis; The settlement price of coking coal futures closed at 310400 yuan / ton, up 12.26% on a weekly basis; The settlement price of thermal coal futures was 879.60 yuan / ton, up 5.62% on a weekly basis.
Guotai Junan Securities Co.Ltd(601211) research report points out that the conflict between Russia and Ukraine continues, and it is expected that the global coal price will still rise and remain strong, supporting China's price. With the intensification of the conflict between Russia and Ukraine, the global price of fossil energy has accelerated, the oil price is approaching us $120 / barrel, and the coal price in Newcastle, Australia has reached nearly US $270 / ton, breaking the high point in 2021. Due to the long-term low global coal capital expenditure and the steep global supply curve of fossil energy, it is expected that the global coal price will still rise and remain strong, further supporting China's price.
However, the national development and Reform Commission announced on March 9 that in 2022, affected by many factors, the international energy supply situation is more severe and complex, energy prices are rising and reaching new highs. At the same time, China's coal consumption is growing rapidly, posing a new challenge to maintaining coal supply and stabilizing coal prices.
In this context, based on the basic national conditions dominated by coal, the national development and Reform Commission has recently held several special meetings on the inter ministerial coordination mechanism for the guarantee of coal, electricity, oil and gas transportation. Focusing on the work of stabilizing and increasing coal production, the national development and Reform Commission has studied the extension of supply guarantee policies and other relevant measures with relevant member units and relevant regions, and further sorted out the coal mines with potential to increase production, We will explore new policies and measures to increase production and ensure supply.
In the next step, the national development and Reform Commission will work with relevant departments, major coal producing areas and key enterprises to continue to strengthen work, improve the coal production, supply, storage and marketing system from the aspects of promoting formalities handling and strengthening emergency reserves, further release high-quality coal production capacity, strengthen coal production adjustment, and strive to stabilize the national daily coal output at more than 12 million tons to ensure reasonable production capacity Sufficient supply and safe transportation and sales.
stabilize the market and ensure supply
Since 2021, the price of agricultural materials has increased significantly, and the prices of chemical fertilizers have risen to a new high in recent 10 years. The 2022 government work report pointed out that the supply and price stability of agricultural materials such as chemical fertilizer should be guaranteed.
Xinyangfeng Agricultural Technology Co.Ltd(000902) ( Xinyangfeng Agricultural Technology Co.Ltd(000902) . SZ) an executive said that the main reason for the difficulty in fertilizer sales in the third quarter of 2021 was the sharp rise in raw material prices. In the third quarter of 2021, the price of the main raw materials of compound fertilizer increased significantly. For example, the price of urea, the main raw material of compound fertilizer, was about 2300 yuan / ton in May, and the price of urea rose to 3300 ~ 3500 yuan / ton in August, up about 50%; Monoammonium phosphate and potassium fertilizer also rose by 30%. This has caused great trouble for dealer procurement in the third quarter of 2021.
Xue Zhenyang said that the price rise of chemical fertilizer is the most direct impact in the short term. In the medium and long term, the government will introduce relevant measures to stabilize the price of chemical fertilizer and appropriately increase subsidies to balance the planting cost.
In fact, China's large agrochemical enterprises are actively responding to the national call to ensure the stability of China's supply.
"Although the prices of raw materials are rising and the market sentiment is unpredictable, the primary task of China's large enterprises is to ensure the stable supply of the market." The above-mentioned executives of Shandong large agrochemical enterprises told reporters that at present, all enterprise production lines are opened to ensure the supply of agricultural materials for spring farming.
On March 2, the Secretary of Sichuan Lutianhua Company Limited(000912) ( Sichuan Lutianhua Company Limited(000912) . SZ) also said publicly that chemical fertilizer is an important means of agricultural production and an important material for agricultural production and maintaining national food security. In 2021, the national development and Reform Commission and other 13 departments jointly issued a notice to deploy all localities to ensure the stable price of chemical fertilizer in China, Sichuan Lutianhua Company Limited(000912) as a state-owned listed enterprise, it actively responded to the call of the state and gave priority to ensuring China's supply.
According to the dispatching information of all China Federation of supply and marketing cooperatives, China supply and marketing group and China Agricultural Materials Association, from November last year to February this year, the total purchase volume of spring farming agricultural materials in the whole system reached 38.214 million tons, a year-on-year increase of 24.13%.
Among them, 377586 million tons of chemical fertilizer, 297200 tons of pesticides and 158200 tons of agricultural film ensure the timely and effective supply of spring farming.
According to the analysis of insiders, the situation caused by sales difficulties in the second half of last year was the low inventory of channels, which created a good opportunity for sales in the first quarter of this year. The inventory level of dealers is low, and the price of raw materials has been running at a high level for six or seven months, and the acceptance of prices in the downstream has increased. From this point of view, the sales in the first quarter of this year will be much more optimistic than that in the second half of last year.
Xue Zhenyang said that the government is expected to take effective measures. On the one hand, it will continue to raise grain purchase prices to enable farmers to obtain more income; On the other hand, we should vigorously increase agricultural subsidies, give more subsidies to farmers, and help farmers increase their income in the form of subsidies.
At the same time, the continuous rise in fertilizer prices has also benefited large companies. Among them, Yunnan Yuntianhua Co.Ltd(600096) ( Yunnan Yuntianhua Co.Ltd(600096) . SH) recently announced that in 2021, the company achieved a total operating revenue of 64.067 billion yuan, an increase of 22.94% over the same period last year; The operating profit was 5.132 billion yuan, an increase of 661.82% over the same period last year; The total profit was 4.867 billion yuan, an increase of 662.69% over the same period last year; The net profit attributable to shareholders of listed companies was 3.637 billion yuan, an increase of 123679% over the same period last year.
Yunnan Yuntianhua Co.Ltd(600096) said that the company's main business is fertilizer and modern agriculture. In 2021, the supply of chemical fertilizer industry in the world was insufficient, and the relationship between supply and demand continued to be tight. At the same time, the cyclical rise of agricultural industry and the rise of Shenzhen Agricultural Products Group Co.Ltd(000061) price have promoted the rise of the price of chemical fertilizer products.
