Fertilizer exports increase in price in the first half of the year

According to customs statistics, China exported 4.766 million tons of chemical fertilizers in the first half of this year, an increase of 30.7% over the same period of last year; the value was US$1.54 billion, an increase of 10.5%; the average export price was US$329.1 per ton, down 15.4%. During the same period, China imported 4.656 million tons of chemical fertilizers, a decrease of 1.5%; value of 2.01 billion US dollars, a decrease of 11.3%; the average import price of 431.5 US dollars per ton, down 9.9%.

First, the main characteristics of China's fertilizer imports and exports in the first half

(i) In the month of June, the volume of imports and exports decreased year-on-year. In June, China's fertilizer exports ended the fourth consecutive month of year-on-year growth. The monthly export volume was 965 thousand tons, a year-on-year decrease of 3.8% and a month-on-month increase of 19%. At the same time, the average export price continued to drop year-on-year, and the decline in June significantly narrowed. The average export price for the month was US$359.3 per ton, which was a year-on-year decrease of 1.8% and a month-on-month increase of 15.3%. On the import side, China’s imports of fertilizers reached 1.128 million tons in April this year, which is a monthly high since April 2007. Since then, it has rapidly declined. In June, imports fell to 50.5 million tons, a decrease of 42.9% and 31.1% year-on-year, respectively. China's import volume of chemical fertilizers has reached a new low of 6 months. At the same time, the average price of imports rebounded slowly from the low level in February, which was US$439.6 per ton for the month of June, which was a year-on-year decrease of 7.9% and a month-on-month increase of 0.9% (see chart).

(b) Imports and exports are based on general trade. In the first half of the year, China exported 3.709 million tons of fertilizer by general trade, an increase of 24.9%, which accounted for 79.3% of China's total fertilizer exports during the same period; and exported 861,000 tons, an increase of 90.8%, accounting for 18.4%. During the same period, China imported 3.318 million tons of chemical fertilizers by general trade, an increase of 3.1%, which accounted for 71.3% of China's total fertilizer imports in the same period; imported 1.015 million tons by borders, increasing 4.2%, accounting for 21.8%; special supervision The regional import of 323,000 tons, a decrease of 39.6%.

(C) The main exports to ASEAN, India and Brazil, the import market mainly in Russia, Canada and Belarus. In the first half of the year, China exported 1.674 million tons, 719,000 tons, and 472,000 tons of chemical fertilizers to ASEAN, India, and Brazil, respectively, an increase of 6.6%, 33.3%, and 43.2%. The above-mentioned three export volumes together accounted for China's total fertilizer exports during the same period. 61.3%. During the same period, China imported 1.577 million tons of chemical fertilizers from Russia, a reduction of 27.5%; Canada and Belarus imported 1.064 million tons and 578,000 tons respectively, an increase of 53.8% and 86.9%, respectively. These three major market imports accounted for the total imports of fertilizers in China over the same period. The amount of 69.1%. (4) Ammonium sulphate and urea are the main export varieties, with potassium chloride as the main import. In the first half of the year, China exported 1.378 million tons of ammonium sulfate, an increase of 44.9%, and exported 1.359 million tons of urea, an increase of 3.2 times, which together accounted for 57.5% of China's total fertilizer exports during the same period. During the same period, China imported 3.634 million tons of potassium chloride, an increase of 0.2%, accounting for 78.1% of China's total fertilizer imports in the same period; imported nitrogen, phosphorus, potassium compound fertilizer 692,000 tons, a decrease of 1.2%, accounting for 14.9%.

Second, in the first half of this year, the main reason for the decrease in imports of fertilizers in China

(1) The excess supply of nitrogen and phosphate fertilizers has prompted enterprises to increase their export efforts. Since the beginning of this year, the demand for domestic fertilizer market has been poor, and production has remained steadily increasing, making the fertilizer market an oversupply situation. According to the data released by the National Development and Reform Commission, the country’s total chemical fertilizer output was 32.9 million tons from January to May, an increase of 9.3% year-on-year, of which nitrogen and phosphate fertilizer production increased by 9.3% and 5.8%, respectively. In particular, long-term surplus products such as urea and ammonium phosphate have ushered in a period of concentrated release of production capacity this year, which has intensified the contradiction between supply and demand in the market. At present, the domestic urea production capacity has exceeded 70 million tons. By the end of 2013, it is expected to approach 80 million tons, and the actual output will exceed 60 million tons. The production capacity of diammonium phosphate will be approximately 21 million tons, and the production capacity of one ammonium will be approximately 18 million tons. The consumption of ammonium and monoammonium was only 7.8 million tons and 9.6 million tons respectively. A large amount of excess supply has forced companies to seek export release pressure.

(II) The substantial increase in the export of ammonium sulfate has driven the increase in the overall export of fertilizers. As an environmentally friendly product for desulfurization, ammonium sulfate is an important nitrogen fertilizer product, and it is also one of the few export zero-tariff products in China. In recent years, driven by continuous expansion of domestic coal-based natural gas, ammonia desulfurization and caprolactam production, the output of ammonium sulfate as a by-product has increased rapidly. In 2012, China’s ammonium sulfate production exceeded 4 million tons, and this year it is expected to exceed 5 million tons. . The continuous increase in production has also led to an increase in exports. China's ammonium sulphate export volume rose rapidly from 889,000 tons in 2009 to 2.153 million tons in 2012. In the first half of this year, the export volume reached 1.378 million tons, a substantial increase of 44.9%, ranking China's top exporter of chemical fertilizers, driving the China's overall increase in fertilizer exports.

(3) Increased domestic potash fertilizer production and high inventory levels have curbed imports. China's imports of chemical fertilizers are mainly potash fertilizers. In recent years, domestic potash fertilizers have been continuously expanded. The new 1 million tons of salt lake production capacity is expected to release 300,000-400,000 tons this year, and the self-supply rate of potash fertilizers has increased significantly. Data show that in May China's potash fertilizer production reached 605,000 tons, an increase of 27.6% year-on-year, from January to May the cumulative output of 2.328 million tons, an increase of 23.4%. At the same time, the port potash fertilizer inventory also maintained high operations. In the first quarter of this year, the domestic potash fertilizer stocks reached 4 million tons, plus the supply of 3 million tons of potash fertilizer contracts in the first half of the year. At present, the domestic potash fertilizer market has seen signs of excess supply. On the demand side, as the potash market continues to be sluggish, both domestic potash fertilizer and imported potash fertilizer prices continue to fall, making the market procurement enthusiasm significantly reduced.

Third, China's fertilizer industry is worthy of attention

(a) The prices of chemical fertilizers in the domestic and foreign markets have continued to fall. The issue of the lack of price speech rights in China has yet to be solved. Since the beginning of this year, the prices of international urea, ammonium phosphate and other products have continued to fall, and domestic prices have been forced to form. In particular, the recent urea bidding in India caused the market to sell, and prices were severely weighed down. Among them, Yuri's small-particle urea FOB price fell from around US$420 per ton in February to US$308-320 per ton in early July, a drop of US$100 per ton, and China’s FOB urea price has fallen below US$300 per ton. The pass is reduced to 293-298 dollars per ton. At the same time, in the past three months, the domestic urea market has also fallen by more than 400 yuan per ton. In addition, the price of ammonium phosphate also remained low, according to the latest data, China's 64% diammonium FOB fell below US$500 per ton to US$475-485 per ton, and domestic 64% diammonium arrival prices have fallen to At 2,900-3,000 yuan per ton, the average operating rate of the national ammonium phosphate plant at the end of June was only 44.26%, which indicates that the operating pressure of the company is large. The factors that caused prices to fall are not only international buyers deliberately suppressing and testing the bottom line of China's fertilizer companies, but also the vicious competition among domestic enterprises to lower prices. China, as a big producer and exporter of chemical fertilizers, has lost the right to speak about market prices and has become a “wounded injury” to the healthy development of the industry. (B) The rapid expansion of global fertilizer production capacity, intensified competition in the export market. In recent years, the global fertilizer production capacity has continuously increased, and China’s fertilizer exports are facing more fierce competition. In respect of nitrogen fertilizer, according to the statistics of the International Fertilizer Industry Association, the world's new urea production capacity was 8.5 million tons in 2013, mainly from China and the Middle East. Global urea supply was approximately 178 million tons this year, while demand increased slightly to 165 million tons. Exceeding the demand of 12.8 million tons, which accounts for 7% of the total supply, the contradiction between supply and demand has further increased. In terms of phosphate fertilizers, the global surplus of phosphate fertilizers is continuously expanding, and new phosphate fertilizer production capacities in Saudi Arabia and Morocco have been gradually put into production. In particular, Saudi Arabia’s production of DAP increased by 33% in the first four months of this year. It is expected that the annual supply will increase by 700,000-1.2 million tons. Due to its small domestic demand, it will be mainly exported to India and compete directly with China’s phosphate fertilizer exports. It will have a certain impact on China's exports.

(III) The utilization rate of domestic chemical fertilizers is not high, and the sustainable development of agriculture in China is facing challenges. According to a report from the Chinese Academy of Agricultural Sciences, the overall level of China's agricultural cultivation is low, and long-term over-fertilization of farmers has resulted in a very low utilization rate of chemical fertilizers in China. The utilization rates of ammonium bicarbonate, urea, phosphate fertilizer, and potash fertilizer are less than 20% and 60%, respectively. About 20% and 45%, of which there are 17 provinces (autonomous regions and municipalities), the average application rate of nitrogen fertilizer exceeds the internationally recognized upper limit of 225 kg per hectare. Excessive use of chemical fertilizers not only results in low utilization of chemical fertilizers, but also leads to serious pollution from agricultural sources. According to the first national pollution source census report, the total nitrogen and total phosphorus emissions from agricultural sources in China exceeded 2.7 million tons and 280,000 tons, respectively, accounting for 57.2% and 67.4% of the total national emissions. The issue of rational use of chemical fertilizers has become a matter of genius, and it has created a severe challenge to the sustainable development of agriculture in China.