|Title:||China annual fertilizer consumption by type in tons for 2006 to 2010|
|Source:||China Chemical Reporter|
Start of full article - but without data
China's application amount of fertilizers during 2006-2010
(million tons) (pure active ingredients)
Year 2006 2007 2008 2009 2010
Total application amount XX.XXX XX.XXX XX.XXXX XX.XXXX XX.XXX Nitrogenous fertilizer XX.XXX XX.XXX XX.XXXX XX.XXXX XX.XXX Phosphate fertilizer X.XXX X.XX X.XXXX X.XXXX X.XXX Potash fertilizer X.XXX X.XXX X.XXX X.XXXX X.XXX Compound fertilizer XX.XXX XX.XX. XX.XXX XX.XXXX XX.XXX
In 2012, China's output and demand for fertilizers will continue to increase but at a comparatively slow rate. Oversupply will still be serious, production costs will grow and profit margins will gradually narrow. In addition, with new capacity going on stream in foreign countries, competitive pressure in the international market will gradually increase. As a product to support agriculture, fertilizer's development will continue to receive great attention in China. In overall, the development prospects of China's fertilizer industry will still be favorable and the adjustment of industrial structure will be accelerated in 2012.
China pays more attention to agriculture
China's investment to agriculture industry climbed from RMBXXX.X billion in 2004 to RMBXXX.XX billion in 2011. The subsidies to farmers released by Chinese central government have grown annually, reaching RMBXXX.X billion in 2011, X.X times more than that in 2006. In addition, China has continued to raise the purchase prices of grain. The minimum purchase prices of rice and wheat were raised to RMBXXX-XXX per XX kg and RMBXX-XX per XX kg, respectively in 2011. China's fertilizer industry will continue to enjoy the subsidy policy mentioned above.
The preferential policies to fertilizer industry will still be retained
The prices of electricity, natural gas and railway transportation lifted in succession in XXX X, but as fertilizer is an important product to support agriculture, China continues to offer the fertilizer industry preferential policies in tax, raw materials, transportation prices and electricity prices. But with increasing market orientation, these preferential policies will gradually fade.
Export policy will be tighter
The export policy of fertilizers in 2012 has not been officially announced. However, China will undoubtedly still implement strict export policies to ensure the domestic supply of fertilizers-Besides the ongoing implementation of strict export policies on urea, ammonium phosphate and NPK compound fertilizers, China will probably raise the export tariff on N-P compound fertilizer, triple superphosphate (TSP), ammonium chloride and small package fertilizers, and implement an off-season and rush-season fertilizer export tariff policy.
Undue expansion of capacity will be discouraged
The development direction of China's fertilizer industry during the Twelfth Five-Year Period (2011-2015) is to strictly con-trol unjustified expansion of capacity. The government will strictly control the initiation of nitrogen fertilizer projects and will not approve newly constructed and expansion phosphate fertilizer plants in the next X-X years. According to the development plan, China's capacity for nitrogen fertilizers and phosphate fertilizers is to be XX.X million t/a and XX.X million t/a respectively in 2015. The urea capacity will also be around XX million t/a.
Accelerate the upgrade of industrial structure
China will encourage some large enterprises to further expand their production scale, support leading fertilizer enterprises and energy companies to achieve advantage complementary and resource sharing, and increase the concentration level of the industry through integrating the production elements and optimizing resource allocation. With the rise of energy prices, stringent environmental protection policies and the formulation of energy consumption standards for products, pressure on the production cost of the mid-size and small fertilizer enterprises will increase, and small enterprises with high energy consumption, high production costs and poor management will be gradually merged or forced out of the market. Enterprises with advantages will accelerate the extension of industrial chains, maximize profits and improve their competitive edge.
Prices of fertilizers will remain high
The prices of raw materials like coal, natural gas, phosphorite and sulfur in domestic market and the fertilizer prices in the international market will continue to climb in 2012, and it is expected that the prices of fertilizers in China will remain high.
Fertilizer demand and output both grew in 2011
Through rapid development in recent years, China has become a leading fertilizer producer, with output accounting for around XX% of the world's total. China's production of nitrogen fertilizers and phosphate fertilizers ranks first in the world. Because China lacks potash resources, potash fertilizer is imported to supply about XX% of domestic consumption.
In 2011, China's demand for fertilizers increased and the prices hiked significantly. The enthusiasm of producers was stimulated and new capacity was gradually put on stream, promoting a notable growth of output. In 2011, China's fertilizer output reached XX.XXXX million tons (pure, hereafter the same), up XX.XX% year on year, ineluding XX.XXXX million tons of nitrogenous fertilizer, up X.XX%; XX.XXXX million tons of phosphate fertilizer, up XX. XX%; and X.XXXX million tons of potash fertilizer, up XX.XX%.
According to statistics, China has around XXX basic fertilizer enterprises, with a total capacity of XX.X million t/a. The production of fertilizers in China is concentrated mainly in Hubei, Shandong, Henan, Sichuan and Shanxi provinces, and the output of fertilizers in these five provinces accounts for around XX.X% of the national total. The production of nitrogenous fertilizer is mostly distributed in coal-and natural gas-rich regions and large consumption provinces such as Shanxi, Sichuan, Hubei, Shandong and Henan, with around XX% output of the national total. Phosphate fertilizer production is mainly concentrated in the regions with rich phosphorite resources like Yunnan, Guizhou, Hubei and Sichuan provinces, with around XX% of the national total output. The production of potash fertilizer is highly concentrated, mainly in Qinghai province and Xinjiang region with around XX% output of the national total. With the enhancement of industry consolidation, the concentration of fertilizers production will further increase.
While the output has been growing, the fertilizer product portfolio has also been continually adjusted and optimized. The proportion of high concentration fertilizer has gradually increased, and the output growth of compound fertilizers is larger than that of single fertilizers. The output of high concentration nitrogenous fertilizers (urea) accounted for XX.X% of the total nitrogenous fertilizers in 2011. In the first XX months of 2011, the output of high concentration phosphate fertilizers (diammonium hydrogen phosphate (DAP) and ammonium dihydrogen phosphate (MAP)) made up around XX% of the total phosphate fertilizer output.
With constant industry consolidation and reform as well as the construction of new, larger plants, the level of industry concentration has also increased constantly. China has XX urea producers capable of lm tons per year, and their combined capacity accounts for XX%-XX% of the national total. The combined output of the top ten DAP producers makes up around XX% of the national total, while the total output of the top ten potash fertilizer producers accounts for around XX% of the national total. Only the compound fertilizer sector is less concentrated: the combined output of the top ten compound fertilizer enterprises is XX% of the national total.
Exports fell substantially
China is a major exporter of nitrogenous fertilizers and phosphate fertilizers. Lacking potash resources, China needs to import a large amount of potash fertilizers annually. In 2011, China raised its export tariffs on fertilizers, reduced the off-season benchmark prices of urea and ammonium phosphate and shortened the off-season period of low export tariffs. In addition, an off-season export deposit was added to the picture. All these factors together caused an unexpected reduction of bulk fertilizer export, including urea and ammonium phosphate in 2011. According to customs statistics, China exported X XXX.X thousand tons of urea in 2011, down XX.XX% year on year. Due to the drastic hike of the production cost for urea in 2010 and restriction of the benchmark price, the competitive edge of domestic urea in the international market was weakened. The MAP export volume was XXX.X thousand tons, a drop of X.XX%. China exported X XXX.X thousand tons of DAP, up X.XX%. While the amount was a slight increase, it was smaller than expected given that the price of ammonium phosphate in the international market increased considerably. Driven by recovering demand for potash fertilizers, China imported X.XXXX million tons of potassium chloride in 2011, up XX.X X%.
In 2011, China exported urea mainly to India, the United States, Mexico, Chile and Korea, and the combined amount exported to these countries was XX% of the total. India, Vietnam, Thailand, Pakistan and Argentina were the major export destinations of DAP, with XX% of the total exports going to these countries. China's major import sources of potassium chloride included Russia, Canada, Israel, Belarus and Jordan, with XX% of the total import volume coming from these countries.
In spite of a decrease in the export of bulk fertilizers, China's export of fertilizer varieties in small output like ammonium chloride, ammonium sulfate, TSP and N-P compound fertilizers increased drastically in 2011. The main reasons for the export hike of small fertilizer varieties are the elimination of the export tariff on both ammonium chloride and ammonium sulfate, and the low export tariff of X% applied to both TSP and N-P compound fertilizers. China exported X.XXXX million tons of N-P compound fertilizers in 2011, showing a drastic growth of XXX.XX%. With export restrictions on urea and ammonium phosphate, domestic enterprises chose instead to export nitrogenous fertilizers and phosphate fertilizers in the form of N-P compound fertilizers to ease the sales pressure in the domestic market and drive up the prices of ammonium chloride, ammonium sulfate and MAP constantly. Due to ceaseless price increases of fertilizers in the international market, some countries like India tended to import N-P compound fertilizers at relatively low prices.
Demand growth continues to re cove
China is the largest user of fertilizer in the world, accounting for around XX% of the world's total consumption. However, China's application of fertilizers is neither heavy nor light.
Except potash fertilizers, China's supply of nitrogenous fertilizers and phosphate fertilizers can fully meet the domestic demand, and some is exported each year. The domestic demand for fertilizers is mainly in agriculture and industry, of which around XX%-XX% is for agriculture and around X%-X% for industry. Beginning in 2010, the growth in demand for fertilizers has recovered. China's total application of fertilizers reached XX.XXX million tons (pure, hereafter the same) in 2010. Growers of grains, vegetables and fruit trees are the major fertilizer consumers, and the fertilizer used on these crops accounted for around XX% of the total. In 2010, the application of nitrogenous fertilizers, phosphate fertilizers, potash fertilizers and compound fertilizers reached XX.XXX million tons, X.XXX million tons, X.XXX million tons and XX.XXX million tons, respectively, up X.X%, X.X%, X.X% and X.X%. The demand for potash fertilizers and compound fertilizers grew relatively rapidly. In 2011, in spite of drastic price increases for fertilizers and slack demand in the spring planting market, the growth in demand for fertilizers continued to recover due to the need of planting and replanting as well as expansion of crop acreage. China's total application amount of fertilizers was estimated to reach XX.X million tons in 2011.
Fertilizer prices stayed at high levels
In 2011, the prices of fertilizers in China were much higher than those in 2010 due to the increase of production costs, rising prices of agricultural products and price hikes for fertilizers in the international market.
In 2011, the price of urea reached its highest level in several years, being RMBXXX-XXX per ton higher than in 2010. Even at the lowest level, during March and April, the bulk ex-factory price of urea remained at more than RMBX XXX per ton. Beginning in May, because of growth of demand for urea in the agriculture sector and a decrease in the urea supply, the domestic bulk ex-factory price of urea increased constantly and hit the year's highest level of RMBX XXX per ton at the end of June, more than RMBXXX per ton higher than in the same period of 2010. The price began to decline in July. However, the overall urea price still remained at RMBX XXX-X XXX per ton. Driven by a drastic increase in the export of N-P compound fertilizer, the bulk ex-factory prices of ammonium chloride and ammonium sulfate rose constantly and reached the highest level of RMBl XXX per ton and RMBl XXX per ton, respectively during August and September, over RMBXXX per ton higher than in the same period of 2010. On the whole, the nitrogenous fertilizer market showed good performance and the sales and profit in the sector increased drastically in 2011.
The market for phosphate fertilizer continued the previous year's boom in 2011. The prices of DAP stayed high because of the increased price of sulfur and phosphorite as well as good export performance. In the first ten months of 2011, the bulk ex-factory price of DAP remained at the high level of RMBX XXX-X XXX per ton, RMBXXX-XXX per ton higher than in the same period of 2010. Because the market demand entered the off-season, DAP prices began to decrease in October. However, because of the high production cost, the DAP bulk prices fell slightly, still remaining at around RMBX XXX per ton. The export price of ammonium phosphate was relatively high in 2011. In the first ten months of 2011, the average export price of DAP and MAP reached US$XXX per ton and US$XXX per ton, respectively, up XX.X% and XX.X% over the same period of 2010.
The price of potash fertilizer in China remained at a high level in 2011, driven by the price rise in the international market and the hike of domestic demand. The contract price of imported potassium chloride was US$XXX per ton in January for the first half of 2011 and US$XXX per ton in June for the second half of 2011. However, the import contract price of potassium chloride was US$XXX per ton in 2010. The rise of the large-contract price boosted the price hike of potash fertilizers. The port price of imported potassium chloride was at RMBX XXX-X XXX per ton during January to June. After the import contract for the second half of 2011 was signed in June, the port price of imported potassium chloride began to climb constantly, being RMBX XXX-X XXX per ton. The price of potash fertilizer in the domestic market rose in 2011 along with a price rise of imported potassium chloride. Qinghai Salt Lake Industry Group Co Ltd raised its quoted price of potash fertilizer five times in 2011. By the end of 2011, the quoted prices of XX% Qinghai potash were mostly at RMBX XXX per ton.
The cost of compound fertilizers is basically from the cost of raw materials. The high prices of single fertilizers boosted the cost hike of compound fertilizers, and the profit margin of compound fertilizer enterprises was therefore gradually narrowed. The price fluctuation of compound fertilizers often lags behind that of single fertilizers, and the fluctuation range of compound fertilizers is smaller than that of single fertilizers. In the first seven months of 2011, the domestic prices of compound fertilizers basically fluctuated at low levels, and the bulk ex-factory price of XX%(S) compound fertilizer remained at RMBX XXX-X XXX per ton. With the gradual price growth of urea, ammonium phosphate and potassium chloride, since August, compound fertilizer enterprises have gradually lifted their quoted prices to RMBX XXX-X XXX per ton. By the end of 2011, the prices of compound fertilizers fell by RMBXX-XXX per ton due to soft demand and price reductions of raw materials. However, the overall prices were still higher than those in the first half of the year.
Table X China's output of fertilizers in 2011 (million tons)
Year 2011 2010 Growth (%)
Nitrogenous fertilizer XX.XXXX XX.XXXX X.XX Phosphate fertilizer XX.XXXX XX.XXXX XX.XX Potash fertilizer X.XXXX X.XXXX XX.XX Total XX.XXXX XX.XXXX XX.XX
Table X China's Import and Export of Fertilizers in 2011
(thousand tons) (physical goods)
Import Export Product 2011 2010 YoY 2011 2010 ...