On the day of waking insects, the hoe doesn’t stop. After waking the insects, most parts of China entered the spring ploughing season. At the end of the field, farmers are busy ploughing, fertilizing and sowing.
Since this year, the price of chemical fertilizer has been rising all the way. The central government recently issued 20 billion yuan of funds to provide one-time subsidies to farmers who actually grow grain, so as to alleviate the pressure caused by the rise in the price of agricultural materials. At the same time, chemical fertilizer production enterprises actively organize production, run full power to ensure the supply of spring ploughing materials in the front line, and make contributions to stabilizing the price of chemical fertilizer.
grant subsidies for spring ploughing fertilizer reserve
March is the key season for spring ploughing and preparation, but the price of compound fertilizer in the terminal market rises again and again.
“Recently, the price of compound fertilizer fluctuates greatly. It is basically one price a day. We all dare to tell customers only after confirming the price with the manufacturer.” Li Qiang, the owner of an agricultural materials store in Pidu District, Chengdu, told the China Securities Journal that the price of compound fertilizer has continued to rise since 2021. At present, the price of some compound fertilizers has doubled compared with the same period last year.
Zhang Li, head of an agricultural materials store in Pengzhou, Sichuan Province, said that the price of some compound fertilizers increased by 1000 yuan per ton in 2021 and is still rising this year.
The rise in the price of compound fertilizer in the terminal market is due to the higher prices of upstream raw materials such as urea, ammonium phosphate and potassium fertilizer. According to China Central Television, since January 2021, the price of ammonia, urea, diammonium phosphate and potassium chloride in the global fertilizer market has increased by 220%, 148%, 90% and 198% respectively.
For the price changes of upstream raw materials, Wang Xingguo, an analyst of Longzhong information fertilizer industry, said that due to the impact of environmental protection policies, synthetic ammonia and urea production enterprises in Jincheng have stopped production recently. Under normal conditions, Jincheng urea production plant can produce about 16800 tons of urea per day. Due to environmental protection requirements, the daily output of urea in Jincheng will be reduced to 9500 tons. At the peak season of fertilizer preparation and use in spring, the demand increases, so the price of urea rises.
China is short of potash mineral resources and has a strong dependence on the import of potash fertilizer. On February 15, the Chinese potash import negotiation team (Sinochem, Zhongnong and CNOOC) and Canadian potash Corporation (canpotex) reached an agreement on the 2022 potash import contract, with the contract price of 590 US dollars / ton CFR This year, the contract price reached a new high in recent five years, with a year-on-year increase of 139%. The latest data show that on March 23, the price of imported potassium chloride was 5100 yuan / ton – 5800 yuan / ton.
In view of the rising price of chemical fertilizer, the national development and Reform Commission, the Ministry of Finance and other departments have made overall arrangements. The first batch of more than 3 million tons of spring ploughing fertilizer reserves in 2022 have been put on the market, and a large number of reserve chemical fertilizers have been put on the market in succession.
In addition, the central government recently issued 20 billion yuan of funds to provide one-time subsidies to farmers who actually grow grain, so as to reduce the impact of rising prices of agricultural materials and mobilize farmers’ enthusiasm for growing grain.
be a good “ballast stone” with full production, guaranteed supply and stable price
Under the circumstances of strong market demand and high price of imported potash fertilizer, Chinese potash fertilizer production enterprises such as Qinghai Salt Lake Industry Co.Ltd(000792) , zangge mining and so on have fulfilled their responsibilities, opened and operated well at full capacity, sold with production, guaranteed supply and stable price at full capacity, and played the role of “ballast” and “stabilizer”.
Since March, Qinghai Salt Lake Industry Co.Ltd(000792) potash fertilizer production workshop machines roared and production lines were fully opened, entering the busiest period of the year. At present, Qinghai Salt Lake Industry Co.Ltd(000792) potash fertilizer branch has carefully organized and reasonably arranged the task of ensuring spring ploughing. On the premise of ensuring safe production, it will operate at full power and full load. At the same time, it will strengthen the fine control of workshop process, prolong the continuous production time as much as possible and reduce shutdown interruption. During the Spring Festival this year, under the circumstances of heavy production tasks and tight time, the potash fertilizer branch gave up the maintenance plan at the beginning of the year and made every effort to ensure the production of potash fertilizer. The company produced 570000 tons of potash fertilizer, up from the end of February last year.
Zangger mining said that in order to improve the stock of potash fertilizer during spring ploughing this year, the company responded to the national call, actively stabilized production and guaranteed price, and worked hard to improve the output of fertilizer preparation for spring ploughing. The company actively compresses the equipment maintenance period and resumes production in February to fully ensure the operation of the production line. Due to the change of transportation cost and other reasons, the company raised the price of products slightly in March. Recently, the average ex factory price of the company’s products is about 4000 yuan / ton (including tax and freight), and the price tends to be stable.
Zangger mining has a design capacity of 2 million tons / year and produces about 1.1 million tons of potassium fertilizer every year. The company’s potassium chloride sales peak season is in the second quarter, and the downstream demand is stable.
Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) and its subsidiary Zhongnong international are mainly engaged in potash mining, potash fertilizer production and sales. In February this year, Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) and Zhongnong holdings signed the 2022 strategic cooperation agreement on ensuring the supply of spring ploughing. The two sides reached cooperation intentions on multiple products, opened up the industrial chain, improved the efficiency of ensuring the supply of spring ploughing, and helped stabilize the price of potassium fertilizer.
taking multiple measures to stabilize cost changes of listed companies
As a compound fertilizer production enterprise in the downstream of the chemical fertilizer industry chain, on the one hand, take multiple measures to reduce costs, on the other hand, stabilize the price and ensure supply without mistaking spring ploughing.
Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) Securities Department staff said that the company reduced energy consumption through technological transformation, optimized product structure and supply system, and reduced the overall cost level.
Yunnan Yuntianhua Co.Ltd(600096) then gave full play to the advantages of its complete “mineralization in one” whole industrial chain and realized the high self-sufficiency of important production raw materials such as phosphate rock, phosphoric acid and synthetic ammonia. Give full play to the advantages of centralized procurement platform, accurately control the procurement rhythm of large raw materials such as sulfur and coal, and effectively reduce the impact of the rise in the price of bulk raw materials. At the same time, strengthen the control and optimization of the production cost of main products, and effectively control the unit energy consumption and material consumption.
Yunnan Yuntianhua Co.Ltd(600096) also made great efforts to stabilize the price. The relevant person in charge of the company told the China Securities Journal that under the organization of China phosphate and compound fertilizer industry association, Yunnan Yuntianhua Co.Ltd(600096) not only fully guaranteed the supply of phosphate fertilizer in China, but also called on other similar enterprises to jointly curb the rise of sales price of diammonium phosphate in China Yunnan Yuntianhua Co.Ltd(600096) chemical fertilizer has an average daily output of more than 25000 tons, making every effort to ensure the demand for fertilizer for spring cultivation in southwest, South China, North China, northeast, northwest and Xinjiang grain producing areas.
Sichuan Lutianhua Company Limited(000912) Board Secretary Wang Bin told China Securities News that at the end of 2021, the company comprehensively estimated and judged the supply and marketing situation of China’s chemical fertilizer market in 2022, the unit was overhauled ahead of schedule, and the urea production unit was started two and a half months ahead of the previous year, laying an effective capacity foundation for spring farming and ensuring supply. Last year, the company actively responded to the national policy of commercial light storage of chemical fertilizer, storing 250000 tons of chemical fertilizer products and supplying the market in the peak season of spring farming. Under the condition of effective macro-control measures, the price of chemical fertilizer in China is 23 Xinjiang Haoyuan Natural Gas Co.Ltd(002700) yuan per ton. The sales price of the company’s main chemical fertilizer products follows the market and basically operates in this range, up 20% – 30% compared with the same period last year.
With the spring ploughing advancing from south to north, the national development and Reform Commission said that a large number of reserve chemical fertilizers will be put on the market in succession to ensure the fertilizer needs for agricultural production in key periods such as spring ploughing. Next, we will pay close attention to the changes in the chemical fertilizer market and continue to do a good job in ensuring supply and price stability, such as the release of reserve chemical fertilizer, together with relevant parties.
