The current spring season is the peak sales season for fertilizers. However, the reporter recently learned that Zhejiang fertilizer companies are hard to see in the spring. Sun Zhixin, deputy secretary-general of the Zhejiang Petroleum and Chemical Industry Association, told reporters that the association is currently conducting a comprehensive survey of the production and operation of chemical fertilizer companies in the province. Due to multiple pressures such as rising energy prices and declining market demand, the province’s fertiliser companies operating rate Less than one-third.
The survey results show that except for the normal start of urea plants of Sinopec Zhenhai Refining & Chemical Co., Ltd. and Juhua Group (the only two urea producers in Zhejiang), other small and medium-sized fertilizer companies are basically in a state of reduced production and production restrictions. The preliminary statistics of the overall operating rate is still less than one-third of the capacity of existing devices. While Zhenhai Refining and Juhua's urea production is stable, the factories have said that profits have been extremely thin or even losses, and the reason why they still maintain normal production is largely based on a social responsibility of large state-owned enterprises. Other fertilizer companies, including ammonium bicarbonate and phosphate fertilizers, complained that they were not satisfied.
It is understood that the reasons leading to the difficulties of Zhejiang fertilizer companies are mainly in three aspects: First, continuous price increases in raw materials, product profits have been further compressed. At present, with the increase in the price of thermal coal, the price of anthracite lump, which is the main raw material for chemical fertilizers, has also risen. It has risen by RMB 30 per ton compared to the beginning of this year. Phosphorus ore prices required by phosphate fertilizer companies have also exceeded 500 yuan a ton, and the supply organization is very difficult; the second reason is that market demand has declined. During this time of last year, the supply of fertilizers was strained across the country, prices rose, and the government’s price limit was also unrestricted. This year's situation is obviously a lot colder. Although the government has limited prices, in fact, apart from the fact that the price of urea is still strong, the prices of other fertilizers including phosphate fertilizer and compound fertilizer are very stable, and the market supply is very sufficient. According to the analysis of the manufacturers, due to the relatively developed economy in Zhejiang Province, farmers’ non-agricultural income has increased, and the enthusiasm for growing grains has declined. At present, most of the varieties are changed to single-season rice or economic crops, and the rice planting area is greatly reduced. Coupled with the transformation of planting methods, such as the transformation of plantings, the use of chemical fertilizers has been greatly reduced; the last reason is that market competition is becoming increasingly fierce. The Midwest enjoys advantages in resources. In recent years, many large-scale chemical fertilizer plants have been installed. Today, railway transportation is relatively convenient and the cost is low. A large number of chemical fertilizers from other provinces flood into the Zhejiang market, which has formed a great impact on local enterprises.
Sun Zhixin believes that the fertilizer industry itself is a resource-intensive industry, and Zhejiang has no such natural resources, which determines that the development of the fertilizer industry is bound to be limited. Moreover, now that the price of electric coal has been liberalized, it is only a matter of time before the increase in electricity prices. As a result, the production costs of chemical fertilizer companies will be even higher. After that, the environment facing Zhejiang fertilizer companies will become increasingly severe. Therefore, in addition to certain advantages in management, Zhejiang chemical fertilizer companies are almost always disadvantaged. Fertilizer companies must seek their own commanding heights in order to survive and develop in fierce competition.
The survey results show that except for the normal start of urea plants of Sinopec Zhenhai Refining & Chemical Co., Ltd. and Juhua Group (the only two urea producers in Zhejiang), other small and medium-sized fertilizer companies are basically in a state of reduced production and production restrictions. The preliminary statistics of the overall operating rate is still less than one-third of the capacity of existing devices. While Zhenhai Refining and Juhua's urea production is stable, the factories have said that profits have been extremely thin or even losses, and the reason why they still maintain normal production is largely based on a social responsibility of large state-owned enterprises. Other fertilizer companies, including ammonium bicarbonate and phosphate fertilizers, complained that they were not satisfied.
It is understood that the reasons leading to the difficulties of Zhejiang fertilizer companies are mainly in three aspects: First, continuous price increases in raw materials, product profits have been further compressed. At present, with the increase in the price of thermal coal, the price of anthracite lump, which is the main raw material for chemical fertilizers, has also risen. It has risen by RMB 30 per ton compared to the beginning of this year. Phosphorus ore prices required by phosphate fertilizer companies have also exceeded 500 yuan a ton, and the supply organization is very difficult; the second reason is that market demand has declined. During this time of last year, the supply of fertilizers was strained across the country, prices rose, and the government’s price limit was also unrestricted. This year's situation is obviously a lot colder. Although the government has limited prices, in fact, apart from the fact that the price of urea is still strong, the prices of other fertilizers including phosphate fertilizer and compound fertilizer are very stable, and the market supply is very sufficient. According to the analysis of the manufacturers, due to the relatively developed economy in Zhejiang Province, farmers’ non-agricultural income has increased, and the enthusiasm for growing grains has declined. At present, most of the varieties are changed to single-season rice or economic crops, and the rice planting area is greatly reduced. Coupled with the transformation of planting methods, such as the transformation of plantings, the use of chemical fertilizers has been greatly reduced; the last reason is that market competition is becoming increasingly fierce. The Midwest enjoys advantages in resources. In recent years, many large-scale chemical fertilizer plants have been installed. Today, railway transportation is relatively convenient and the cost is low. A large number of chemical fertilizers from other provinces flood into the Zhejiang market, which has formed a great impact on local enterprises.
Sun Zhixin believes that the fertilizer industry itself is a resource-intensive industry, and Zhejiang has no such natural resources, which determines that the development of the fertilizer industry is bound to be limited. Moreover, now that the price of electric coal has been liberalized, it is only a matter of time before the increase in electricity prices. As a result, the production costs of chemical fertilizer companies will be even higher. After that, the environment facing Zhejiang fertilizer companies will become increasingly severe. Therefore, in addition to certain advantages in management, Zhejiang chemical fertilizer companies are almost always disadvantaged. Fertilizer companies must seek their own commanding heights in order to survive and develop in fierce competition.