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Trucks rising costs will change the chemical fertilizer industry?
Source:China's fertilizer network   Time:2016-10-12   Read:561second  

   Fertilizer is the commodity, in recent years, pricing a mind-blowing &railway, highway recently began to vigorously illegal transfinite governance truck overloading behavior, means that fertilizer freight would rise further. On the one hand, fertilizer prices falling, on the other hand, transportation cost and launches. In this background, logistics which impact on the chemical fertilizer industry?

  Party a: short enough to support prices

  The ministry of transport, ministry of public security regulation on administration of highway transfinite transport vehicle is already effective as of September 21. New rules to overrun overload standard tonnage broadly lower, such as capacity of six axis largest automobile train overload criteria fell to 49 from 55 tons tons, 4 axis cargo bikes standards overload by 40 tons to 31 tons. At the same time, also to the car shipment is width height were clear, total height shall not be more than 4 m, total width no more than 2.55 meters, shall not exceed the total length of 18.1 meters, stated in 49 tons maximum fine of 30000 yuan... The new rules are also referred to as "the history of the most YanZhi measures".

  Compared with trains, trucks deliver goods fast, flexible, timely, within 500 km radius, motor transport most fertilizers are taken. Industry knows, fertilizer trucks overloading transfinite is a common phenomenon, after the enforcement of the new rules, car shipped quantity limited, virtually also increased freight rate. Some enterprises in shandong, said an official from the local to henan, the original load 40 tonnes per car, tons of freight rate of about 100 yuan, the total rate of 4000 yuan. According to the new rules, local traffic load can't more than 31 tons, on the basis of the total amount of freight, fertilizer rate will rise to about 130 yuan per ton. Has done more detailed accounting professionals, according to chemical fertilizer rate 35%, so the meeting about 35 yuan per ton.

  On the surface, the super cure of freight or is not small, should for fertilizer price forming certain support in theory, but the overall look at the impact on the market is limited. The fertilizer market weak downstream demand, farmers have fat not active, because of the need for risk aversion distributors and retailers, prefer the increases with the increasing in the mode of operation.

  Under the circumstances of market is not prosperous, have add the freight in the end most digestion or upstream enterprises, which may by two ways: one is the fertilizer factory price remains the same, but to give the dealer subsidies must be freight; Second, vendors pay the freight, companies cut appropriate ex-factory price. Second way, of course, there is a certain risk for manufacturing enterprise, most enterprises are more likely to approach is through the rebate or other promotion preferential policies, to help the dealers to offset the increased freight costs.

  In short, the key factor of the current market or supply and demand, trucks rising costs, far enough to support the market stabilization or higher.

  Party b: layout will change the fertilizer market for a long time

  In recent years, fertilizer production capacity has a tendency to tend to be more centralized, in some provinces or regions formed a very large chemical fertilizer production base. Such as phosphate fertilizer production capacity are mainly concentrated in hubei and southwest regions, nitrogen fertilizer production capacity is more and more tend to coal, and these companies can't digest so large capacity, a large number of product will be sent to major grain producing areas. Especially those large compound fertilizer production base, the raw material need to call in from the other cities, after processing of compound fertilizer and to bring up, formed the pattern of two head out.

  So the layout of the chemical fertilizer industry, as the freight rise, will gradually weaken the capacity of market competitive advantage. Therefore, in order to offset the transportation cost of increasingly bullish, large enterprise beyond the trend of factory is now becoming more and more obvious. In jilin fuyu county, for example, only been reported is the new ocean feng, red square, Stanley three big companies in their factory. Like new the abundant plans to set up a wholly owned subsidiary in local investment, and will invest in the newly built yearly produces 800000 tons of new compound fertilizer project, total investment of about 400 million yuan. Stanley fuyu, 600000 tons of new compound fertilizer project, completed in September 10, is expected to start production time in April 2017, the plant can produce 250000 tons of compound fertilizer. After the completion of these projects, it can effective radiation the northern market, is the most intuitive effect, shorten the product transportation radius, increase the scale of enterprise core competitiveness.

  In the long run, fertilizer industry, including freight, various preferential policies will be cancelled, for the enterprise to reduce the cost pressure is more and more urgent. For the national layout fertilizer enterprises, in the appropriate areas equipped with reasonable production is the inevitable way to enhance the competitiveness of enterprises. As you might expect, the regional character of fertilizer consumption in the future will be more obvious, and area of small and medium-sized fertilizer enterprises will face the test.

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