From April 20th onwards, the implementation of the 53 years of fertilizer preferential tariff policy to cancel all. Cancel preferential electricity prices in the short term impact on the market is not expected to be too large, mainly the market has been expected. Last year, the document has been introduced, the market has been digested a year earlier, urea prices rose significantly, one of the important reasons is that the price rise in advance of the reaction. "In the long run, the price increase will make the bottom of the fertilizer more solid, because this is after all, increase the cost of things." Hunan TOYOTA agricultural company chairman said. He believes that the abolition of preferential tariff will bring three aspects of the impact of the fertilizer market.
The advantage of urea in the northwest region is more obvious. In recent years, Inner Mongolia, Xinjiang and other places with abundant coal resources, a new urea of many large enterprises, compared to the old urea enterprises, the new enterprise large scale, advanced technology, low coal prices, low cost, competitive advantage prominent. With the abolition of preferential tariff, urea production in the northwest region is more obvious, this year may become the main force of the urea industry. In other parts of the cost of urea increased, and the cost of urea may fall even, because these new companies would not enjoy many preferential price, coupled with the local coal is very cheap, cheap price. And they are power users can enjoy more preferential price in electric power company, cancel the preferential tariff of these enterprises may be good.
New technology of urea enterprises have the advantage. According to industry experts, in accordance with the current market price of urea, only 20% to 30% of the country by the use of new coal gasification equipment urea enterprises can maintain profitability, 70% ~ 80% of the enterprises in the state of loss. At present, Shandong Province, with an annual output of more than 10 tons of urea, 200 thousand of the main enterprises, the profit of only 3. After the abolition of preferential tariff, due to the adoption of a new type of coal gasification equipment urea enterprises low power consumption, increase the price of its impact on small, competitive advantage is more obvious.
Decline in international competitiveness. Cancel preferential tariff, increase the cost of production, chemical fertilizer enterprises in the international market competitiveness decline, coupled with the international low cost of fertilizer production capacity continues to increase, China's export of chemical fertilizers are facing a severe test.
Cancel preferential electricity prices, overall, the fertilizer business adverse, but the abolition of preferential tariff will force the transformation and upgrading of fertilizer enterprises, accelerate the elimination of backward production capacity, is conducive to the purification of the market. China nitrogen fertilizer industry association data show that in 2015 the domestic demand for nitrogen fertilizer was 57 million tons, the actual output reached 71 million tons, a surplus of nearly 25%. 2015 ammonia production capacity of 5 million 800 thousand tons, the new capacity of 2 million 380 thousand tons, 3 million 420 thousand tons of production capacity reduction. Net production capacity fell for the first time, an important reason is that electricity prices rise forced to withdraw from the enterprise. Middle and small fertilizer price is expected to rise 0.1 yuan / kWh, nearly 40 million tons of urea production capacity is affected.