Compound fertilizer fades

At present, the market has a large stockpile for compound fertilizers. Some people think that due to the production cost support, there is little room for falling compound fertilizer prices. Now, it is possible to begin to take lighter stocks; another view is that after the increase in electricity prices, the cost will increase in the short term. The market may not have much problems, but after the spring begins, affected by factors such as increased production, blocked exports, and falling prices of agricultural products, prices are likely to rise and fall, so they continue to wait and see. In general, most dealers are more cautious. In the face of the high price of chemical fertilizers this year, many grass-roots distributors are using their own funds to carry out bankrolls, and are no longer raising funds from the banks or from the community. In order to avoid bearing the burden of interest and debt repayment pressure, the risk is even greater.

On November 30, the National Development and Reform Commission announced that starting from December 1, the national electricity price will be raised, and the sales price will be raised by an average of 3 points (per kilowatt-hour, the same below). From the current understanding of the situation, the increase in the price of chemical fertilizer companies are mostly higher than this level, Shandong chemical fertilizer prices rose 5.78 points, Hubei chemical fertilizer prices rose 6.6 points, Anhui fertilizer prices increase by a small margin, 2.66 points, most companies are expected to urea Production costs will increase by RMB 40-50/ton, and individual highs may reach RMB 70/ton. The increase in electricity prices has led to a direct increase in the cost of nitrogen, which is obviously beneficial to the stability of compound fertilizer prices. It is expected that the compound fertilizer manufacturers will not be able to produce low prices again, and pre-phase preferential payment policies may be gradually cancelled, and some manufacturers may increase prices.

In the past, it was generally started in October. This year, due to the high price of compound fertilizers, there was no major progress in light reserves from October to November. In December, it entered the critical period of light storage. The increase in electricity prices has stimulated distributors to get goods. With certain benefits, it is expected that the slow-release of compound fertilizers in December will be significantly faster than in previous months, and the rate of start-ups for enterprises will also rise significantly.

However, there are two major unfavorable factors in the compound fertilizer market. First, the prices of agricultural products such as fruits and vegetables have fallen sharply. This year, the agricultural product price index continued to decline. The fruit price index fell from 124 in last year to 104 this year. The price index on vegetables has fallen from 118 in last year to 99.5 this year. The national potato price has dropped by nearly 30% year-on-year. Apart from the fact that food prices are relatively firm, many agricultural products have fallen sharply, and fruits and vegetables have become the hardest-hit areas. The purchase price has dropped to a few cents or even a cent per pound. Farmers are miserable. Vegetables and fruit trees are used by big households, and prices have fallen so sharply that farmers are worrying about using fertilizers. The second is market supply pressure. Fertilizer export policy will continue to tighten next year. Exports of large quantities of binary fertilizers, small-package fertilizers, etc., which will be exported this year, will drop sharply next year. Coupled with new capacity factors, the supply pressure in the fertilizer market will increase significantly next year, and the fertilizer market should not be too optimistic. .