Over the years, the domestic urea based fertilizer prices overall showed a wide concussion situation. Hot market, prices hit record highs, to make the production, circulation enterprises earned surplus alms bowl full of pots; and the market downturn, enterprises will suffer unspeakably, a series of losses. However, with the recent by interweaving effect from policy, market, technology and many other factors, the fertilizer price rainbow night trend is coming to an end, nitrogen or the market will enter a new round of economic cycle. 

First, the expansion of production capacity tends to be orderly and industrial layout to rationalize. At the beginning of this year, the Ministry issued " ammonia access conditions " formally implemented, called synthetic ammonia the history of the most stringent measures: no new device with natural gas and anthracite as raw material principle, 3 years of coal transferred no new production capacity, new capacity in principle, production scale of not less than 1000 tons / day etc.. These restrictions on new capacity conditions, is undoubtedly the expansion of the previous blossom everywhere throwing a pot of cold water to cool. The " conditions " guiding device production in eastern area of synthetic ammonia and orderly transfer to the western coal production, the construction of large coal synthesis ammonia production base. Therefore, the relevant departments of the state will be supporting the introduction of relevant policies to encourage, promote reasonable industrial layout. At the same time, the coal supply line is too long, the logistics costs rise, and the limited capacity of the local environment and other factors, the eastern and Western nitrogenous fertilizer enterprises have a desire for cooperation, realize a win-win situation in the better use of resources. Visible, it can ease the Eastern District overcapacity, avoid frequent price war, in order to maintain market stability and high degree of prosperity.

Second, the market supply and demand relations harmonious. As of the end of 2012, the total ammonia production capacity in China has reached 67000000 tons, urea production capacity of 71000000 tons of synthetic ammonia and urea, and this year will add production capacity of 4300000 tons, 6800000 tons, if all forms of production capacity, production capacity of urea than the real effective demand of nearly 20000000 tons, the supply and demand situation is naturally nitrogen fertilizer market prices may also produce wide shocks hidden danger. However, the role of " conditions " like running vehicle hit the brakes in time, make the subsequent expansion has been effectively controlled. Especially with the supply of natural gas is more inclined to the people's livelihood, and the gas price adjustment is imminent, gas head of urea is not only difficult to further expansion, but its production capacity accounted for by the current nearly 30% decreased year by year, until the complete withdrawal. Thus, the new capacity of being released and gas head urea gradually shrinking, can achieve a dynamic equilibrium between increment and decrement, positive effect on nitrogen fertilizer market stability.

Third, the technical threshold Daobi effect appeared. " Ammonia energy consumption unit conditions " set different raw material limit, such as the comprehensive energy consumption of unit product of smoke-free lump coal≤1500 kilograms of standard coal / ton, and the provisions of the existing enterprises within 3 years to achieve the above standard. At the same time is not up to the standard of " three wastes" emissions, environmental accidents, major security, comprehensive energy consumption is higher than the average tons of ammonia unit of national standard, will be out of order as backward production capacity. Obviously, wash off a number of backward production capacity, reduce the interference part quality products on the market impact, more conducive to the healthy and stable nitrogen fertilizer market.

In addition to the above factors, and slightly before the national development and Reform Commission issued the " special and rare coal development and utilization management Interim Provisions ", to take total control of scarce coal includes anthracite, coal price of urea costs supporting enhanced. At the same time, urea off-season export tariffs reduced from 7% to 2%, to increase exports. These are also support nitrogen into the boom cycle anticipation.