"This year, the supply and demand of urea in the mainland will increase; The phosphate fertilizer industry benefits from the hot new energy industry, which will drive the demand for phosphoric acid and industrial monoammonium phosphate; Although the price of potash fertilizer industry is at a low level, the rigid demand is stable, and the prosperity of the industry is expected to increase in the future. At the 2024 Fertilizer Market and International Trade Seminar held in Yichang, Hubei Province recently, the participating experts made an overall optimistic judgment on the operation of the fertilizer industry this year.
Urea: supply hits a new high
The reporter learned that this year's urea supply may reach a new high, and consumption is also expected to increase. From this point of view, the supply and demand of urea this year will turn from tight to loose.
According to Hu Yanli, manager of the nitrogen fertilizer division of China Agricultural Group Holding Co., Ltd., from the supply side, under the stimulation of national policies, more than 130 power units will complete the transformation of liquid ammonia to urea denitrification in 2024. In addition, according to the statistics of the China Nitrogen Fertilizer Industry Association, the new domestic urea production capacity in 2024 will be 4.69 million tons (annual production capacity, the same below). Among them, the new urea production capacity in the first half of the year was 3.35 million tons, accounting for 71.4% of the new production capacity this year. From this point of view, urea production is expected to reach 67.9 million tons in 2024, a year-on-year increase of 7.9%, and domestic urea supply may reach a new high this year.
On the demand side, according to the calculation of the China Nitrogen Fertilizer Industry Association, it is expected that the non-agricultural demand for urea will be 21.5 million tons in 2024, an increase of 2 million tons year-on-year; Agricultural demand is 39.1 million tonnes, which is expected to be the same as last year. Overall, it is expected that urea consumption in mainland China will continue to grow this year.
However, it is worth noting that the mainland's urea export space may be squeezed this year. India's urea imports are estimated at 4 million to 5 million tonnes in fiscal year 2024, down from 7.5 million tonnes in 2023, the chemicals and fertilizer minister said.
Hu Yanli explained: "India, the largest destination for urea exports from the mainland, will have a significant increase in urea self-sufficiency, and it is expected that the new urea production capacity will reach 1.27 million tons this year. With the gradual release of India's new urea production capacity, the mainland urea export market space will be further squeezed. In the long run, India's new urea production capacity has been released in recent years, India's urea production capacity has increased from 25 million tons two years ago to 31 million tons now, and India may stop importing urea after 2025 as more urea plants are put into operation in the future. ”
Overall, the domestic urea market is still in the stage of centralized launch of new production capacity. At the same time, the amount of urea imported by India may decrease, which will affect the growth of urea exports in the mainland, so it is expected that the mainland urea market will be loose in supply and demand this year.
Phosphate fertilizer: supply and demand are generally stable
Wang Ying, director of the information department of the China Phosphate Compound Fertilizer Industry Association, said: "In 2023, the production capacity and output of the phosphate fertilizer industry in mainland China will increase compared with the previous year, and the overall capacity utilization rate of the industry will be about 75%. With the development of refined phosphoric acid and new energy precursor industries, phosphate fertilizer acids are diversified, but the demand for phosphorus in agriculture remains relatively stable. On the whole, it is expected that the supply and demand of phosphate fertilizers will be stable this year. ”
In terms of production capacity, in 2023, the mainland's phosphate fertilizer production capacity will reach 21.7 million tons (P2O5), an increase of 2.4% year-on-year. Among them, with the commissioning of new energy projects, the industrial ammonium phosphate production capacity exceeds 3.5 million tons. Wang Ying said, "At present, the industry is actively promoting transformation and upgrading and structural adjustment, and with the development of the new energy industry in the future, the production capacity of phosphoric acid and industrial monoammonium phosphate will show a growth trend, but the growth rate will begin to slow down." ”
In terms of output, in 2023, the mainland's phosphate fertilizer output will reach 16.151 million tons (P2O5), a year-on-year increase of 6.1%. In 2023, the mainland's ammonium phosphate production will account for 86% of the total phosphate fertilizer production; The output of industrial-grade monoammonium phosphate has increased for three consecutive years, reaching 2.223 million tons in 2023, a year-on-year increase of 16%, and the growth rate has slowed down. On the whole, with the decrease of phosphate rock grade, the increase of phosphogypsum utilization pressure, and the enhancement of the awareness of co-associated resource utilization, low-concentration phosphate fertilizer will still maintain a certain market share. In terms of consumption, the apparent consumption of phosphate fertilizers in mainland China will increase by 1.0% year-on-year in 2023, with little overall fluctuation, mainly due to the increase in demand for industrial monoammonium phosphate.
However, despite this, the phosphate fertilizer industry in mainland China is still facing shortcomings such as the contradiction between supply and demand, insufficient resource endowment, and weak comprehensive resource capacity. In this regard, Wang Ying believes that the industry should promote the supply and price stability of phosphate fertilizers, guide enterprises to scientifically schedule production, maintain reasonable inventory, and stabilize market expectations; Backbone enterprises should actively develop new high-efficiency phosphate fertilizers and high value-added phosphorus chemicals, and traditional fertilizers should be transformed into high-end, green, environmentally friendly and other new and functional fertilizers. In addition, in terms of upstream resources, the industry needs to eliminate phosphate rock enterprises that do not have safe production conditions, promote the comprehensive utilization of medium and low-grade phosphate rock and tailings, and increase the utilization of calcium, fluorine, silicon, iodine, magnesium and other comprehensive resources; In terms of agricultural demand, the industry should pay attention to the change of fertilizer demand structure by fertilization methods.
Potash: Rigid demand is stable
The mainland is the world's largest potash fertilizer consumer, with an import dependence of 50%, so the international potash fertilizer price will directly affect the price trend of the mainland. According to Niu Jianbo, business manager of the marketing department of SDIC Xinjiang Lop Nur Potash Co., Ltd., global potash fertilizer production capacity will grow in the long term, and is expected to grow from 64 million tons in 2022 to 70 million tons by 2027, with an annual growth rate of more than 2.2%. According to data from the International Fertilizer Industry Association, the global demand for potassium chloride will reach about 65.07 million tons in 2023, a year-on-year increase of 1.93%, and it may grow at an annual rate of 2% in the next few years. On the whole, under the condition that the international potash fertilizer price is approaching 300 US dollars / ton, the willingness of international suppliers to expand production is reduced, the market enthusiasm is weakened, and the global potash fertilizer price is expected to remain low in the short term without major changes.
From the perspective of the domestic situation, Niu Jianbo said that by the end of 2023, the inventory of potash fertilizer ports in the mainland has accumulated to 3.3 million tons, and the overall import volume of potassium chloride in the first quarter of this year exceeded 4 million tons, which is at a relatively high level. From the perspective of consumption, in 2023, the apparent consumption of potash fertilizer in mainland China will be 17.89 million tons, a year-on-year increase of 14.5%, and the rigid demand will grow steadily.
Overall, Niu Jianbo believes that under the premise of the mainland's policy of ensuring food security, the supply of potash fertilizer in the mainland is affected by factors such as the reduction of domestic potassium production, the uncertainty of imported sources, and the gradual increase in supply-side pressure, while the rigid demand for potash fertilizer is stable, so the supply and demand of the potash fertilizer market are in a state of game this year.
In addition, due to the current potash fertilizer prices have been at a historical low, although the rigid demand has been delayed but still exists, and the cost-effective advantage of potash fertilizer single nutrient is highlighted, the current market has seen a pullback, the concentration of supply is high, the domestic high inventory situation or will be alleviated, and the market supply pressure in the second half of the year is expected to be less than in the first half of the year. At the same time, affected by the price of non-ferrous commodities, the prosperity of the potash fertilizer industry is expected to increase. (Wang Lijin)