Basic conclusion
Supply side reform and limited new production capacity have greatly improved China’s past surplus supply of chemical fertilizer, and the profit of chemical fertilizer products has shown a central upward trend. In recent years, China has carried out supply side reform for industries with excess capacity, and gradually cleared the excess capacity in the industry through environmental protection rectification and returning to the park. Through the two-way control of supply and demand, the capacity utilization rate in the industry has rebounded after reaching the bottom, and the industry pattern has been gradually improved. At the same time, the new capacity of nitrogen and phosphorus fertilizer in China is relatively limited. As a coal chemical product, nitrogen fertilizer is subject to two-way constraints of energy consumption and carbon emission, and the new capacity is regulated; Ammonium phosphate products are located in the national list of restricted production capacity. According to the 14th five year plan, the new production capacity will also be strictly limited. The superimposed industry will continue to eliminate the expanded production capacity, and the industry pattern is expected to be continuously optimized.
For self-sufficient nitrogen and phosphorus fertilizer products, the state is expected to curb excessive product prices through supply and demand adjustment, but there is still good support for the operation of the price range, which will be reflected in the continuous optimization of the pattern and the steady improvement of the center in the long term. Compared with overseas, China’s overall fertilizer market has strong particularity. China has a national reserve policy, forming a certain buffer at the supply side. At the same time, China’s nitrogen and phosphorus fertilizers can be completely self-sufficient, with strong initiative and adjustable space.
Urea supply is better than usual this winter, but it is relatively orderly. It is expected that the price will run within the range. This year, the state’s measures to ensure the supply of chemical fertilizer have focused on forming a certain support for the supply of gas head raw materials, and urged the orderly implementation of relevant long-term cooperation orders. Therefore, although the start of gas head urea this year has a downward trend in December, it has not formed a Cliff drop. At the same time, the start of coal head urea is relatively stable, driving the overall urea supply in an orderly manner. It is expected that the start-up of urea in winter will be relatively stable, and it is difficult for urea to form the supply and demand basis for sharply raising the price in previous years, but the demand support and orderly start-up will support the maintenance of the range operation of urea price. It is still optimistic about the improvement and cyclical weakening of urea profit center for a long time. It is suggested to pay attention to coal urea production enterprises Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) and gas urea production enterprises Sichuan Meifeng Chemical Industry Co.Ltd(000731) ;
The long-term pattern of ammonium phosphate is better, and the short-term price is expected to operate relatively smoothly. In the short term, monoammonium phosphate has experienced a large price correction. Under the downward trend of raw material price, the procurement of downstream winter storage and spring farming will continue to wait and see. In the process of gradually increasing the demand for goods preparation in peak season, it is expected to support the existing industry pattern. At the same time, the price difference of monoammonium phosphate has fallen to a relatively low level at this stage, and it is expected that there will be some recovery space in the future; The export of diammonium phosphate increases, the output decreases, the inventory is low, the fundamentals are supported, and it is expected to have a stable operation trend. In the long run, the ammonium phosphate industry continues to clear the backward production capacity at the supply end and optimize the industry pattern. At the same time, under the situation of relatively stable agricultural demand in the downstream, the demand for new energy positive materials will provide space for further improvement of the industry pattern. It is expected that phosphorus chemical products and upstream phosphorus ores will operate better in the long run, It is suggested to pay attention to phosphorus chemical enterprises such as Yunnan Yuntianhua Co.Ltd(600096) , Shanghai Zhongyida Co.Ltd(600610) ;
Potash fertilizer needs to rely on imports, and the products still have strong fundamental support in the short term. It is recommended to pay attention to relevant policy guidelines in the long term. Due to the lack of self-sufficiency of China’s potash fertilizer, the rise of overseas prices has conducted the price of China’s potash fertilizer. However, affected by China’s stable agricultural materials policy, the price of potash fertilizer has not risen further and has basically remained relatively high. Generally speaking, China’s potash fertilizer imports are reduced, consumption inventory is consumed, and potash fertilizer has fundamental support under the support of demand. However, whether the potash fertilizer price can further rise needs to pay attention to the future trade situation and the signing of large orders. It is recommended to continue to pay attention to the signing of large contracts and the development of sanctions against Belarus. It is recommended to pay attention to the potash fertilizer enterprise, Asia Canada International, etc.
Risk statement
The policy greatly affects the supply risk of China’s chemical fertilizer industry; Chemical fertilizer trade policy change risk; Risk of changes in the signing of contracts; Risk of sharp fluctuations in raw material prices; Global new capacity change risk.
