Urea exports are poor

In the first half of this year, China’s urea production capacity was excessive and exports suffered low prices. According to data released by the National Bureau of Statistics, domestic urea production reached 6.583 million tons in June and reached a record high. In the first half of this year, domestic urea production was 36.7 million tons, an increase of 10.6% over the same period last year. According to customs data, domestic urea was 35,100 tons in June, down 61.6% year-on-year. In the first half of this year, the total domestic urea export volume was 1.309 million tons, a year-on-year increase of 167%, and the average export price was around US$370.

In this regard, China Investment Advisor Chemical Industry Researcher Li Jianan told reporters that China's urea exports suffered from low prices due to the domestic market due to food safety issues, farmers need to slow down, supply companies to stabilize the market share to fight the price war in the domestic market continued sluggish At the same time, the same is true of the international urea market. The imbalance between supply and demand has already led to restrictions on production and production suspension in suppliers in Eastern Europe, the Middle East, and so on. In the short term, the contradiction between supply and demand is still difficult to ease. Therefore, the low price of China's urea exports also reflects the price trend in the international market.

Can not be ignored is that the current domestic urea into a production cycle. As the price of domestic urea sinks, especially when it comes close to the cost line, companies do not dare to easily reduce the production burden because reducing the operating rate means increasing costs. In addition, this year's coal industry has shown a trend of decline. With the continuous decline in coal prices, the cost of urea has been declining. As long as the company does not lose money, or the loss is within an affordable range, the company will continue to produce at full capacity. This has also caused the excess contradictions to remain unsolved.

Undigested urea at home can only be expected to export. It is reported that in 2013, the urea season was generally more lenient than that of 2012. Now China is about to enter the low-tariff export window period in the off-season, and the export tariff of fertilizers will be reduced, which will reduce export costs. Some people think that this move will increase the competitiveness of urea in the world market. force.

In this regard, Li Jianan believes that lower export tariffs can reduce export costs and help China's urea industry to open the world market with price advantage, but low-cost sales do not mean that it can bring substantial profits to domestic companies, on the contrary, due to the domestic industry capacity Excessive, constant price war squeezes profit margins.

With excess domestic urea production capacity, it is not a long-term plan to expand sales in the world market with low-price exports. Li Nannan suggested that the future of the domestic urea industry should transform into high-end products in order to increase the core competitiveness of enterprises, increase the added value of the unit products, and increase the profitability of the company.

The reporter learned from the interview that it is expected that the supply of urea industry in China will still be surplus in the later part of this year, and domestic demand will not improve in the short term. Because of the oversupply of products, the decrease in export prices will help transfer some sales to foreign markets and will reduce the price shocks. The price of urea for the next six months was slightly lower.