Fertilizer Enterprise: Simultaneous Intervention in Raw Material Market
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Yin Runsheng said that in recent years, as long as the fertilizer market fluctuates slightly, the country will immediately take measures such as limiting the maximum ex-factory prices of fertilizers, checking prices, increasing export tariffs, and suppressing fertilizer prices. Although the current price of chemical fertilizers has surfaced on the surface, in fact, the rise and fall in fertilizer prices is still dictated by policies such as tariffs. As for the price of raw materials such as coal, which actually affects the production costs of chemical fertilizers and largely determines the price of chemical fertilizers, the intensity of state intervention is obviously insufficient, and it is even completely market-oriented. On the one hand, the price of raw materials for chemical fertilizers has continued to rise. On the other hand, fertilizer prices have been difficult to increase simultaneously under the policy, and the efficiency of fertilizer companies has been declining.
Taking this year as an example, the price of coal for fertilizer production has been steadily rising as fertilizer prices continue to fall and urea prices hit a new low of less than 1,500 yuan/ton in recent years. At present, ordinary bituminous coal prices rose by 120 yuan/ton over the previous year, and smokeless lump coal rose by 180 yuan/ton. The cost of synthetic ammonia thus increased by 250 yuan/ton or more. As a result, from September to September, more than 90% of coal-head enterprises suffered losses. “In the near future, the price of fertilizer has just recovered and the company is slightly profitable. The state immediately introduced a policy to restrict exports and suppress fertilizer prices. In the later period, if the prices of raw materials continue to skyrocket, fertilizer prices cannot rise simultaneously. It will also expand, cut production, stop production or even bankruptcy will increase the number of companies, fertilizer production and supply will be substantially reduced, the price will rise again, the purpose of regulating fertilizer prices may fail." Yin Runsheng said.
Yin Runsheng suggested that while regulating the fertilizer market, the state should increase its intervention in coal prices, or provide subsidies for rising raw material prices according to the annual output of chemical fertilizer companies and actual coal consumption, reduce the losses of fertilizer companies, and allow more enterprises to operate normally. We will increase the supply of chemical fertilizers to ensure the long-term benefits of spring plowing of fertilizers, fertilizer companies and farmers.
Gas-headed fertilizer companies have also proposed that the country should adopt an iron fist to effectively ensure the use of gas for fertilizer production, so that the fertilizer companies will not suffer from product price constraints and "short gas".
A person in charge of a large-scale fertilizer company in southwestern China reported to reporters that since 2006, gas-headed fertilizer companies have been “not enough to eatâ€. This year, the short-term phenomenon has become more serious. All local gas-to-gas fertilizer companies have actual gas consumption of 70% of the planned gas consumption, and some even less than 60%. Calculating the current cost and product prices, the fertilizer plant loading rate can only reach 90% or more to achieve economic operation. The long-term low-load operation of fertilizer companies caused by insufficient gas supply not only drastically increased the energy consumption and cost per unit of product, but also caused a total loss of gas-to-liquid fertilizer enterprises in Southwest China.
“In order to protect the interests of farmers and ensure national food security, we can accept and implement all intervention policies adopted by the fertilizer market. However, at the same time as fertilizer companies maintain their national interests at the expense of their own interests, can the supply units also be able to Reducing one's own interests and providing more for the fertilizer companies? Can the national authorities respond to the fertilizer market so quickly and decisively and decisively to take effective measures so that fertilizer companies do not have to deal with rice for a long time?†The person in charge said excitedly.
Phosphate compound fertilizer companies prefer the state to take measures to increase the supply of sulfur and stabilize the price of sulfur.
According to Liu Xianchen, general manager of Hubei Huangmailing Phosphorus Chemicals Group Sales Co., Ltd., China's sulfur dependence on foreign resources is as high as 80%, which is similar to potash fertilizer. However, the number of importers is too large to be consistent with foreign countries. It is difficult to negotiate with foreign businessmen with one voice, and there is no right to negotiate initiative and bargaining power. Even when the supply of sulphur is tense, prices are raised each other and the interest is lost. Relevant government departments or industry organizations may wish to take the lead, referring to the potash fertilizer negotiation mode, and designating a few enterprises or units to represent China's phosphate and compound fertilizer enterprises to carry out negotiations on the import of sulphur prices, in order to obtain favorable prices and ensure supply. This will not only significantly reduce the procurement costs of phosphate fertilizer companies, but also maintain the stability of the sulfur market, and then stabilize the market and price of phosphate compound fertilizer. In addition, it is recommended that the country remove sulfur import tariffs, or return first to minimize the burden on the company. This kind of market behavior under the WTO rules will receive better results than simple, frequent interventions in the fertilizer market.