This year, the price of fertilizer innovation is low, serious excess capacity has become the industry consensus. To capacity as the industry's top priority, then, to the who's capacity, how to capacity and to the results of the production capacity is what?

　　From a global perspective, to be able to take into account the three dimensions: the proportion of production capacity, the importance of the industry, the price advantage. In steel, for example, China accounted for 50% of the global output, China not to capacity, even if other countries to capacity caused by supply and demand relations changes will not be too large; as the most important industrial base, any countries also are not easily all rely on imports, so any a country will maintain the basic capacity (rigid capacity); although China Iron and steel once through the loss produced a price advantage, and a large number of exports, but in the end it must return to its capacity to track.

　　Another example is China's initiative to capacity: such as cotton and corn, which is characterized by the country's strategic security does not constitute a significant impact, and does not have the global price competitiveness. Based on the above dimensions, the global capacity of chemical fertilizer to have the following characteristics: nitrogen fertilizer must be China to capacity, phosphate fertilizer must be the global and China to share the task of production capacity, potash fertilizer must be foreign capacity.

　　To the means of production capacity

　　Through the analysis, we can see that there are three modes to the production capacity: the agreement to capacity, competition to capacity, administrative capacity to go.

　　Competition capacity to rely on price is the means, the typical example is oil prices fell, resulting in a sharp decline in oil shale production in the United States, China has shut down part of the high cost of oil field and the final prices bottomed rebound.

　　Administrative capacity to is a typical example of China's coal industry, Yajian capacity targeted, effective measures (limited production, limit the time limit), the effect is obvious: 1 ~ 6 months, coal production in the same period last year dropped by 9.7%, 6 in coal production is up sharply decreased by 16.6%, coal prices to rebound fell, the whole industry realized profitability.

　　The decline in the coal industry's 10% or so production has brought the whole industry turnaround, but also the reason for the loss of the fertilizer industry may be due to the 35".

　　What is the result of going to capacity

　　A part of the short-term shut down, become potential production capacity, the price increase is converted into an effective capacity; the other part will be permanently shut down.

　　Remove 20% or even 10% of capacity, you can change the chemical fertilizer market, if choose to compete to capacity will harmed (such as steel, coal industry to fight a few years, have not been a winner). Hope that the fertilizer industry can find a better way to resolve the production capacity.