The international market is overturned, and the domestic urea has great achievements
June 12, 2024, 9:21 AM
Jinlianchuang
2645
Guide
Highlights at a glance
Amid global fertilizer export restrictions, Kyrgyzstan, Russia, and Ukraine imposed temporary bans or quotas on fertilizer exports in early 2022, disrupting international markets and impacting domestic urea prices in China. Russia, a top global fertilizer exporter, plays a critical role in nitrogen, potash, and phosphate supplies, with China heavily reliant on imports from Russia and Belarus. These external shocks, combined with declining domestic urea output—down to 53 million tons in 2022 from a 2015 peak of 75.33 million tons—have tightened supply. Despite idle capacity, China’s urea exports are expected to drop to 4.5 million tons, just 32% of the 2015 high. To stabilize prices, China implemented urea export inspections and launched spring supply保障 measures. While domestic demand remains subdued at 48.5 million tons, below 2013 highs, policy support may boost export potential post-domestic planting season if global shortages persist.
According to foreign reports, on February 22, Kyrgyzstan decided to temporarily ban the export of fertilizers to countries outside the borders of the Eurasian Economic Union for a period of six months. On March 10, Russia announced that it would suspend some fertilizer exports and implement export quotas for some fertilizers. Almost at the same time, on March 12 Ukraine announced a temporary ban on the export of all types of fertilizers. There is also news that on April 6, Russia will extend the export quota of fertilizers until the spring of 2023. For a time, the international fertilizer market was overturned, and the domestic urea market was not immune.
Internal and external linkage, domestic chicken dance
According to data, Russia has replaced China as the world's largest urea exporter from 2020, accounting for 14% of the global market trade volume. According to statistics from Jinlianchuang, Russia is the world's largest exporter of nitrogen fertilizers, the second largest exporter of potash fertilizers, and the third largest exporter of phosphate fertilizers, while my country's imports of potash fertilizers from Russia and Belarus account for more than half of its total imports. It can be seen that in the short term, the situation of the international fertilizer market has changed abruptly, and the domestic fertilizer spot and futures prices are not only difficult to survive alone, but have even begun to dance.
In 2015, the production capacity of domestic urea plants was at its peak, reaching the historical extreme value of about 89 million tons in the same period. The output in the same period was as high as 75.33 million tons. The overall capacity utilization rate of the industry was as high as 84.64%. Subsequently, under the influence of environmental protection policies, the domestic production and sales of urea turned down, and it is difficult to show the scenery of yesterday. Jinlianchuang Information believes that the effective production capacity of domestic urea plants is expected to slightly increase to about 75 million tons in 2022, but due to multiple unfavorable factors, the overall capacity utilization rate of the industry may drop to about 70%, and the annual output may drop to historical levels The low value is about 53 million tons.
It can be seen that although the production capacity of domestic urea plants in 2022 is equivalent to 84% of the highest value in 2015, the production during the same period only accounts for about 70% of the 2015 production capacity. Over the past seven years, the idle rate of domestic urea plant capacity has increased by 16%, but the output has dropped by 30%.
It is expected that in 2022, the domestic export volume of urea may drop significantly to about 4.5 million tons, which only accounts for about 32% of the highest export level of 13.74 million tons in 2015. From the perspective of ensuring supply and price stability in the current domestic market environment, the utilization rate of domestic urea production capacity still has great room for improvement. We can not only meet the domestic market demand, but also have a strong price advantage to occupy the international market.
The domestic policy of ensuring supply and stable prices can make a big difference
There is also earlier news that since October 15 last year, the General Administration of Customs has included urea fertilizer varieties in the "Catalogue of Export Commodities that Must Be Inspected" (ie, export legal inspection). According to the National Development and Reform Commission, on March 22 this year, the second meeting of the working mechanism for ensuring supply and price of chemical fertilizers requires that according to the situation of maintaining supply and price of chemical fertilizers in the spring of this year, it is necessary to start from the production, supply, storage and sales of chemical fertilizers, and take multiple measures to consolidate them. Responsibilities in all aspects, and do a good job in ensuring the supply and price of fertilizers for spring ploughing.
In 2022, the apparent consumption of my country's urea market is expected to exceed 48.5 million tons, accounting for only about 76% of the historical high of 63 million tons in 2013. The domestic urea market demand is still in a state of slow decline, but the decline continues to narrow.
From the perspective of agricultural solar terms, most of my country's land is located in the temperate zone of the northern hemisphere, the planting period of most crops is concentrated in the second quarter, and the pressure on the domestic urea market to maintain supply and stabilize prices is also concentrated at this time. Following the principle of policy requirements above all else, it is unrealistic to expect the spot price of urea to be unique in the second quarter, and the implementation of the fertilizer legal inspection policy is also based on this. We believe that judging from the monthly data of urea exports for many years, my country's urea export peaks are mostly concentrated in the third and fourth quarters of each year. Especially from the perspective of economic recovery, if there is still a lack of urea supply and demand in the international market, and the domestic crop planting period has passed, the international urea market demand will quench thirst, and the possibility of urea export will not be ruled out.
Internal and external linkage, domestic chicken dance
According to data, Russia has replaced China as the world's largest urea exporter from 2020, accounting for 14% of the global market trade volume. According to statistics from Jinlianchuang, Russia is the world's largest exporter of nitrogen fertilizers, the second largest exporter of potash fertilizers, and the third largest exporter of phosphate fertilizers, while my country's imports of potash fertilizers from Russia and Belarus account for more than half of its total imports. It can be seen that in the short term, the situation of the international fertilizer market has changed abruptly, and the domestic fertilizer spot and futures prices are not only difficult to survive alone, but have even begun to dance.
In 2015, the production capacity of domestic urea plants was at its peak, reaching the historical extreme value of about 89 million tons in the same period. The output in the same period was as high as 75.33 million tons. The overall capacity utilization rate of the industry was as high as 84.64%. Subsequently, under the influence of environmental protection policies, the domestic production and sales of urea turned down, and it is difficult to show the scenery of yesterday. Jinlianchuang Information believes that the effective production capacity of domestic urea plants is expected to slightly increase to about 75 million tons in 2022, but due to multiple unfavorable factors, the overall capacity utilization rate of the industry may drop to about 70%, and the annual output may drop to historical levels The low value is about 53 million tons.
It can be seen that although the production capacity of domestic urea plants in 2022 is equivalent to 84% of the highest value in 2015, the production during the same period only accounts for about 70% of the 2015 production capacity. Over the past seven years, the idle rate of domestic urea plant capacity has increased by 16%, but the output has dropped by 30%.
It is expected that in 2022, the domestic export volume of urea may drop significantly to about 4.5 million tons, which only accounts for about 32% of the highest export level of 13.74 million tons in 2015. From the perspective of ensuring supply and price stability in the current domestic market environment, the utilization rate of domestic urea production capacity still has great room for improvement. We can not only meet the domestic market demand, but also have a strong price advantage to occupy the international market.
The domestic policy of ensuring supply and stable prices can make a big difference
There is also earlier news that since October 15 last year, the General Administration of Customs has included urea fertilizer varieties in the "Catalogue of Export Commodities that Must Be Inspected" (ie, export legal inspection). According to the National Development and Reform Commission, on March 22 this year, the second meeting of the working mechanism for ensuring supply and price of chemical fertilizers requires that according to the situation of maintaining supply and price of chemical fertilizers in the spring of this year, it is necessary to start from the production, supply, storage and sales of chemical fertilizers, and take multiple measures to consolidate them. Responsibilities in all aspects, and do a good job in ensuring the supply and price of fertilizers for spring ploughing.
In 2022, the apparent consumption of my country's urea market is expected to exceed 48.5 million tons, accounting for only about 76% of the historical high of 63 million tons in 2013. The domestic urea market demand is still in a state of slow decline, but the decline continues to narrow.
From the perspective of agricultural solar terms, most of my country's land is located in the temperate zone of the northern hemisphere, the planting period of most crops is concentrated in the second quarter, and the pressure on the domestic urea market to maintain supply and stabilize prices is also concentrated at this time. Following the principle of policy requirements above all else, it is unrealistic to expect the spot price of urea to be unique in the second quarter, and the implementation of the fertilizer legal inspection policy is also based on this. We believe that judging from the monthly data of urea exports for many years, my country's urea export peaks are mostly concentrated in the third and fourth quarters of each year. Especially from the perspective of economic recovery, if there is still a lack of urea supply and demand in the international market, and the domestic crop planting period has passed, the international urea market demand will quench thirst, and the possibility of urea export will not be ruled out.
Recommended for you
-
International Fertilizer Market - Potash Giants Report First Quarter: Signs of Recovery in Potash Demand! Meanwhile, Russian Fertilizer Exports to the US Reach Annual High4659
-
Phosphate Fertilizer Weekly Report: Supported by Pending Orders and Costs, Firm Prices4308
-
Urea Weekly Review: Cautious Buying and Slow Follow-Up, Prices Hold Steady4401
-
Urea Daily Review: Weakened Supply-Demand Support, Enterprises Lower Prices to Attract Orders4359
-
Phosphate Fertilizer Daily Review: Pending Orders Support Prices, Stability in the Short Term4385
June 12, 2024, 9:21 AM
June 12, 2024, 9:21 AM