Fertilizer prices are skyrocketing?
From September 21st onwards, the “Regulations on the management of the highway transportation vehicles” was officially implemented. According to the new regulations, six axis and six axis above the train car, goods vehicles total quality shall not be more than 49 tons; and before the provisions of the six axis and above the total vehicle weight of not more than 55 tons, has some market participants expected freight price increase of up to 20 – 30%. With the increase of the cost of road transport, a lot of fertilizer companies choose to increase the amount of rail transport and maritime transport. At the same time, domestic coal transportation, food transport into the seasonal peak, considering factors such as Spring Festival, the railway is expected to supply tension will continue until 2017 “51″.

In fact, the domestic fertilizer transport has been blocked for several months, the current market is most concerned about the topic is: inadequate supply of raw materials, product delivery difficulties, fertilizer winter reserves will not be affected? Will there be a shortage of fertilizer in the spring of next year? Fertilizer market prices will not rise?
Reporters from the Inner Mongolia Tianyu Sceneway industrial group Limited by Share Ltd responsible people learned that the recent Qinghai potash transport problems become the focus of the industry. Potassium fertilizer could not be shipped, the production of inland compound fertilizer was also affected by the impact. Some customers in the northeast, North and northwest regions have been reflected in the lack of fertilizer. But despite the recent potash prices rose 150-200 yuan / ton, but affected by the exchange rate, rising costs have more than 240 yuan / ton, road transport costs also increased, or even in some areas reached 30%, for the potash enterprises is undoubtedly one disaster after another. Future such cost pressures or will continue to be transferred to the downstream.
Golmud, Qinghai, Fang Li, deputy chief executive of potash fertilizer Co., Ltd., which holds the same view. She said: “the enterprise warehouse stock is limited, the pressure is huge. And the shortage of domestic potash fertilizer has a serious impact on the sales link. Nearly a period of time, the opportunity to continue to import potash fertilizer, to seize the domestic potash market, the northeast region and the coastal ports are dependent on imports of potassium, domestic potash market has been seriously squeezed. Qinghai to enter the empty shortage, directly lead to downstream fertilizer production enterprises and some dealers “no rice pot”, the market sentiment is very urgent.”

In this regard, middle peasants group Cmi Holdings Ltd K manager Wang Bei said: “if the Qinghai potash fertilizer Sinotrans pressure will affect the spring, and ultimately to see next year 1-2 month capacity can be eased. In the short term, the price of potash fertilizer has been affected by multiple factors. First, exchange rate changes lead to the cost of imports rose 70-80 yuan / ton; secondly, highway transportation, railway freight regulations limit super cancel preferential policies superimposed after increasing pressure caused by transportation; in addition, the previous stage of potash low prices, sales of large, near port potash inventory low and border trade volume is less, the price rebound in reason.”
Transport tensions more than in Qinghai, the price increase is not limited to potash fertilizer. Henan Jin Kai Group, said Yang Tongyu, deputy general manager of Sinochem Fertilizer Company Limited, said: “due to the tight capacity, a lot of urea enterprises because of raw materials and affect the production. Due to road transport limit, Yulin coal transportation vehicles in the factory discharged a dozen kilometers, the transportation cost is increasing domestic urea prices there is an important reason to rise. “.” It seems that, in the city of Shanghai, deputy manager of Department of agricultural fertilizer, agricultural means of production Co. Ltd. Liu Jinlin since September, urea prices rose nearly 400 yuan / ton, but also a rising trend, increased many unstable factors for the market. Shanghai surrounding water urea prices rose 25% from the previous 30 yuan / ton rose to 38-40 yuan / ton, the price of trucks from the previous 60 yuan / ton rose to 70-80 yuan / ton. In a short period of time to increase the cost of pushing up the price of chemical fertilizers, and even continued to surge. How long can the price rise last? We are difficult to predict for the time being. But from a business point of view, the rapid rise in fertilizer prices is not conducive to the circulation of reserves, the majority of the market to choose a calm and wait.”

Spring in sight
How to protect agricultural demand?
Inadequate supply of raw materials, downstream companies normally start to be affected, the circulation of the shortage of reserves. The crisis caused by the strain of capacity is the ultimate threat of domestic agricultural production in spring. In Yang Jinbang view, the market needs of potash, potash can not reach the market is the focus of conflict. “At present, the domestic potash market supply tight, has affected the normal operation of compound fertilizer manufacturers, some of the company’s production target or will not be able to reach. Now from the spring peak time only a month, if you can not solve the related problems in the near future, Qinghai fertilizer transport problem may lead to domestic fertilizer in spring next year is extremely tight.”

Speaking of the impact of inadequate capacity, the six countries in Anhui chemical Limited by Share Ltd deputy general manager Xu Dongkui said: a large part of the company’s potash raw materials from Qinghai. In the short term, transport tensions have not yet let the enterprise can not operate, but the threat is the existence of. On the one hand, potassium chloride raw material stock cycle increased significantly; on the other hand, the company’s own product delivery problems. At present, the fertilizer area concentrated in the south, northwest and northeast, is the long distance transportation capacity, if long-term problems are not solved, fertilizer production and management of enterprises will be very difficult, may be forced to stop production in extreme situations.” Hubei three Nanjing Chemical Limited by Share Ltd deputy general manager Mao Guobin believes that if the country can give some policy support in potash transportation, will greatly alleviate the transportation pressure, ensure the stable operation of the fertilizer market in spring. “If the difficulty of Qinghai potash fertilizer can not be effectively resolved, will affect the supply and demand of potash market, may lead to the rise of fertilizer prices in spring next year. In addition, the transport costs of the increase in the transport of the fertilizer is also required to slow the market to digest.”

Market believes that the domestic fertilizer transport tensions are not the case, but the serious problems affecting the entire industry. Large scale chemical fertilizer enterprises to occupy the body mass and geographical advantages, can be part of the transport policy tilt, many small and medium enterprises feel the pressure is more obvious. In addition, reporters from news sources say that the current daily 19 thousand carriages transport plan in East China Railway Bureau can cash only 10 thousand knots. And affected by the policy, the relevant transport sector bears the dual task of coal supply and North Grain south. Under the accumulation of contradictions, transport difficulties faced by the fertilizer industry seems to be difficult in the short term through the market means to be resolved.

In fact, in the special policy after the cancellation of agricultural fertilizer transportation, transportation costs and other industry merger. Special commodities seem to be no longer special. However, as the key inputs to ensure agricultural production, the special property of chemical fertilizer has not changed fundamentally, and the timely and adequate transportation of chemical fertilizer should be attached great importance to the relevant departments. Fertilizer transport can not be a priority in the tight security? Will the future of chemical fertilizer be able to have a green channel at a special time?
In the fertilizer industry as a whole in the moment of anxiety, in 2017, the Spring Festival is quietly approaching.