Currently, the basic nitrogen fertilizer industry device starts at a low level of 75%. According to the China Fertilizer Industry Association, released at the conference "China's nitrogen fertilizer production in 2010 to run the first half of the report" shows that the first half of this year, a lot of nitrogen fertilizer production enterprises in China were forced to stop or early repair. Among them, the long-term parking and bankruptcy Transferring of the urea production capacity up to 300 million metric tons of urea parking up to 45 companies. In addition, as the market downturn, natural gas supply issues, there are nearly 200 tons of urea production capacity of the new urea plant production delay.
        Investment Advisor in the chemical industry researchers often Yi Zhi that from the first half of the nitrogen fertilizer industry, the production run data, our country most of the nitrogen fertilizer business in the red, and some enterprises have even faced with bankruptcy. The emergence of this situation, mainly by the contradiction between supply and demand in the domestic fertilizer market and increased production costs caused.
        Yi-Chi Chang pointed out that currently, the market supply and demand imbalance is the current main problems in nitrogen. In recent years, nitrogen fertilizer production capacity in China has maintained an average annual growth rate of more than 10%, but the rapid expansion of production capacity was not accompanied by rapid growth in demand. Since last year, the domestic fertilizer market demand has not been busy, making nitrogen fertilizer industry excess capacity does not release the space, the excess in serious condition.
        Urea, for example, investment advisers, according to the release of "2010-2015 China Fertilizer Industry Investment Analysis and Prediction of the report" shows in China ,2007-2008 projects under construction and planned to reach 600-910 million tons of urea, as of 2009 China's urea production capacity to 63 million tons, while demand is only about 50 million tons, more than 1,000 tons of excess capacity. In 2010, 2009, had excess capacity, while in 2009 the new production capacity will continue to play a role, together with the 2010 completion of new facilities are urea, urea, excess capacity will be further exacerbated the situation.
        Yi-Chi Chang also pointed out that the production costs, this year, domestic coal prices rose in some areas has reached 25%, while natural gas prices rise substantially, together with electricity, water and other resource prices also appeared different levels rise, making the cost of nitrogen fertilizer producers to increase production, but also increased the nitrogen fertilizer production businesses, causing a loss of nitrogen fertilizer business or bankruptcy.
        Natural gas prices, for example, investment advisers, according to the release of "2010-2015 China Fertilizer Market Report Investment Analysis and Prediction," shows that if gas prices rise 0.2-0.4 yuan per cubic, 1 ton of urea fertilizer production costs will increase by 120 -240 dollars. If gas prices rise 0.2 yuan / cubic meters of natural gas chemical industry-wide loss of face. The National Development and Reform Commission in May 31, 2010 notice, the base price of domestic onshore natural gas shipped from the 925 yuan per thousand cubic meters up to 1,155 yuan, 230 yuan per thousand cubic meters increase. In other words, the natural gas price increase of 0.23 yuan / cubic meter, which greatly compressed natural gas fertilizer production enterprises profits.
        Yi-Chi Chang believes that the current, nitrogen industry overcapacity situation remains serious, but a limited number of domestic demand, China's fertilizer industry has a serious contradiction between supply and demand. The contradiction between supply and demand in the short term that is difficult to resolve, making nitrogen fertilizer industry between supply and demand for a long time in the future will likely continue, the domestic nitrogen fertilizer production is very unfavorable to the development of enterprises. In addition, nitrogen fertilizer production costs coupled with rising international price of urea is low, the export situation is not optimistic about such issues, the late survival of the domestic nitrogen fertilizer producers will also face more severe challenges. (South jade)