Industry commentary: Fertilizer companies will continue to withstand double squeeze
We started to export 10kV Transmission Line Steel Pole to Philippines from 2004 and supply more than 50,000 pcs each year.
Our firm introduced whole set of good-sized numerical control hydraulic
folding equipment(1280/16000) as well as equipped with a series of
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lengthways cut machine, numerical control cut machine, auto-closed up
machine, auto-arc-weld machine, hydraulic redressing straight machine,
etc. The firm produces all sorts of conical, pyramidal, cylindrical
steel poles with production range of dia 50mm-2250mm, thickness
1mm-25mm, once taking shape 16000mm long, and large-scale steel
components. The firm also is equipped with a multicolor-spayed
pipelining. At the meantime, for better service to the clients, our firm
founded a branch com. The Yixing Jinlei Lighting Installation Com,
which offers clients a succession of service from design to manufacture
and fixing.
10kV Steel Pole, Low voltage Steel Power Pole, Steel Power Tubular Pole, Steel Tubular Post Jiangsu Xinjinlei Steel Industry Co., Ltd. , https://www.jinleisteelpole.com
In 2004, China's fertilizer production and demand both hit a record. The output of chemical fertilizers reached 45,777,700 tons (refined), and the amount of fertilizer used in agriculture reached 46.37 million tons. Domestic demand, coupled with soaring exports, has created a situation in which the domestic chemical fertilizer market is in short supply. However, from July 1, 2005, after the country imposed a 30% tariff on urea exports, urea once appeared zero exports. Although the country subsequently lowered its export tariffs to 15%, fertilizer exports remained limited. Relevant data show that the annual chemical fertilizer output in 2005 increased by more than 3 million tons from the previous year, and the inventory of enterprises and supply and marketing systems has increased, while the increase in domestic fertilizer consumption has declined. It is understood that China's new fertilizer production this year will exceed 4 million tons, and it is expected that the total amount of fertilizer will exceed 51 million tons, and the nitrogen fertilizer market will exceed supply. The self-sufficiency rate of phosphate fertilizer in China has reached 94.3% in 2004. After the new plant is put into operation this year, it will be completely self-sufficient, and there may be a situation where supply exceeds demand. Therefore, in addition to the large gap in potash fertilizer this year, there is no shortage of fertilizer in the domestic market. This change in supply and demand makes this year's fertilizer prices even if the country is not open, the possibility of a substantial increase is not great.
At the same time, the high production costs of chemical fertilizer companies cannot be changed. Taking nitrogen fertilizer as an example, nitrogen fertilizer production enterprises using coal as raw materials in China account for about 70% of the total number of enterprises. Most of these companies use anthracite lump coal. At present, the factory-paying price of anthracite lump coal has exceeded 700 yuan per ton, and the cost per ton of urea has exceeded 1,400 yuan, based on 1 ton of urea-consuming 1.5-ton coal. The oil head urea cost more than 1,500 yuan per ton, and gas head urea costs more than 1,250 yuan per ton. At the end of 2005, natural gas prices began to increase in an all-round manner, and the use of gas for chemical fertilizers increased by 50 to 100 yuan per 1,000 cubic meters. The national coal ordering meeting that has just concluded has received news that under the premise of maintaining the overall stability of coal prices, relevant state departments will cancel temporary intervention measures for coal prices. In 2006, coal prices will be independently determined by coal and power companies. This change may bring about an increase in the price of electricity and coal for chemical fertilizers. These all clearly tell the fertilizer companies that it is not easy for this year's production costs to come down.
For such a situation, the fertilizer production enterprises must be fully prepared to formulate ways to ease the double squeeze in advance. Otherwise, after going through the good years of the first two years, a considerable number of fertilizer companies may have to enter 'small age'.