Nitrogen fertilizer industry turned from profit to loss in the first quarter

Recently, the 2020 China Nitrogen Fertilizer Industry Association Market and Trade Committee Working Conference hosted by the China Nitrogen Fertilizer Industry Association was held in the form of a video conference. The meeting believes that the demand for nitrogen fertilizer agriculture in the first quarter of this year is significantly better than last year, but due to the inversion of nitrogen fertilizer product prices and costs, the nitrogen fertilizer industry has turned from profit to loss.

In the first quarter, the whole industry worked hard to produce nitrogen fertilizer, and successfully completed the task of spring supply nitrogen fertilizer supply and price stability. According to statistics from the China Nitrogen Fertilizer Industry Association, from January to March, the national nitrogen fertilizer output was 9.772 million tons, an increase of 4.8% year-on-year; the output of urea was 13.4 million tons (physical volume), an increase of 8.8% year-on-year. According to estimates, in the first quarter, China's apparent consumption of nitrogen fertilizer increased by 8.1% year-on-year, of which urea increased by 14.6% year-on-year, but the price decreased by 10.5% year-on-year.

The demand for nitrogen fertilizer agriculture in the first quarter was significantly better than last year, but due to the inversion of nitrogen fertilizer product prices and costs, the nitrogen fertilizer industry has turned from profit to loss. According to statistics, the total profit of the nitrogen fertilizer industry from January to March 2020 was -0.75 billion yuan.

Regarding the situation of the nitrogen fertilizer market in the second quarter, experts said that the favorable factor is that agriculture has a strong demand for nitrogen fertilizer; second, the domestic epidemic prevention and control level has declined, the national economy has gradually recovered, and industrial demand is expected to rebound; third, the effect of a series of national economic stimulus policies will be Gradually appearing; Fourth, affected by the epidemic, the output of large nitrogen fertilizer producing countries such as India has decreased, and import demand has increased; Fifth, China's urea costs and prices have declined, and international competitiveness has improved significantly; Sixth, some regional circulation links have low stocks; Seventh, domestic Newly built production capacity will be put off production; eighth, some enterprises will arrange for overhaul.

Unfavorable factors include that the foreign epidemic situation has not been controlled, and the export situation of chemical products is difficult to improve in the short term; the international and domestic energy prices are operating at a low level, and the prices of nitrogen fertilizers and chemical products are relatively low; the highway recovery charges, the freight rate will increase.

The meeting hopes that nitrogen fertilizer production enterprises should strengthen communication and cooperation with downstream users and circulation enterprises, control sales rhythm according to demand, and maintain reasonable inventory. It is necessary to ensure the stable supply of fertilizers for summer, but also to consider the affordability of circulation enterprises and users to avoid large price fluctuations.