Fertilizer companies calmly consider new tariffs

“The new tariff policy is good news for the fertilizer industry as a whole, but it should not be blindly optimistic, let alone exaggerating its role in the fertilizer market and the fertilizer industry. There are many factors that affect the trend of the fertilizer market and the degree of industry prosperity. It is definitely not a tariff policy. It can be decided.” On December 24th, the head of some fertilizer companies expressed this view in an interview with reporters.

The “new tariff policy” referred to by the company refers to the “2013 Tariff Implementation Plan” issued by the Ministry of Finance on December 17th. The "Programme" stipulates: Since January 1, 2013, the export tariffs on nitrogen fertilizers and phosphate fertilizers have been moderately lowered. Among them, when the urea export base price did not exceed 2,260 yuan/ton, the export tariff was reduced from 7% in the same period in 2012 to 2%, and the other nitrogen fertilizers, including ammonium chloride, were all subject to a 2% export tax rate in the off-season; In the off-season, export tariffs are reduced by 2% to 5%, off-season time is extended from 4 months to 5 months, and the export base price of diammonium phosphate is raised to 3,500 yuan/ton, diammonium phosphate and ammonium dihydrogen phosphate and hydrogen phosphate two. The export base price of ammonium mixture was raised to RMB 3,200/tonne; potassium-containing fertilizers including **potassium, potassium chloride, etc., the export tariff was changed from ad valorem measurement to specific measurement, and a 2,000 yuan/ton tax rate was implemented.

Yin Runsheng, executive deputy general manager of Shaanxi Coal & Chemical Suihua Group Co., Ltd., said that the “plan” has injected positive energy into the fertilizer market as a whole, and it also meets everyone’s previous expectations, supporting the recent stabilization and slight rebound of fertilizer prices. In particular, it is worthy of recognition that after the implementation of the “Programme”, there will be a certain decline in the export costs and costs of chemical fertilizers, which will theoretically benefit the export of chemical fertilizers, ease the contradiction in the domestic chemical fertilizer market oversupply, and promote the stable operation of the fertilizer market.

However, he also reminded that the long-term effect of the implementation of the "Program" should not be overly optimistic. Because what happens to the international fertilizer market in the end? It is not known to what extent the domestic production and demand of chemical fertilizers are unbalanced.

“Because of the overall better performance of chemical fertilizer companies in 2012, the supply of raw materials is also relatively sufficient, and the equipment load rate is generally higher. After the “Program” was promulgated, the enterprises are more determined to be optimistic about the confidence of the fertilizer market and stimulate everyone to start production at full capacity. It also stimulates new projects. Accelerating the construction schedule and putting it into production at an early date will eventually aggravate the contradiction between the oversupply and demand in the domestic chemical fertilizer market next year.If the international market is sluggish at that time and the export expectations brought about by the “plan” will be lost, then the domestic fertilizer market will not only be difficult for the bull market but may even continue. Run low.” Yin Runsheng said.

Xu Yanyu, deputy general manager of Jiangsu Linggu Chemicals Co., Ltd., said that the introduction of the “Proposal” boosted market confidence, enabled dealers to boldly pick up the goods, and pushed the recent ex-factory price of urea to RMB 1950/ton from the lowest level in the previous period and gradually rebounded. The current 2160 yuan / ton, the volume is slowly enlarged.

However, she is not optimistic about the long-term effect of the implementation of the "Programme." First, from the actual situation in recent years, there is no port and transportation companies, export fertilizer does not make money. The production capacity of chemical fertilizers in China is mostly concentrated in the central and western regions that do not have the aforementioned advantages. Although the implementation of the “Program” can reduce the export costs of enterprises to a certain extent, it can not offset the rising costs of transport, labor, terminal warehousing and customs inspections. The second is whether the international fertilizer market will help domestic fertilizer exports to be unpredictable; the third is that even if the international market is stronger by that time, exports will be profitable. If domestic companies are swarming and exporting, causing domestic fertilizer market volatility, the government will temporarily introduce strict regulations. The tariff policies are all unknown.

As a domestic backbone producer of phosphate and compound fertilizer, the Hubei Yihua Group's viewpoint represents the views of phosphate fertilizer companies on the “Programme”. The company's marketing minister Xiong Linchen told the reporter: According to the current ex-factory price of only 3,000 yuan/ton of diammonium phosphate, there is a gap of 500 yuan/ton between the “base price” determined in the “plan” and it seems that high-concentration phosphorus compound fertilizers There is more room for growth in the later period. However, the actual situation is: On the one hand, domestic DAP production capacity is over 100%, suppressing its price can not continue to rise; on the other hand, with artificial, phosphate ore and raw materials, transportation, management, finance and safety and environmental protection costs Surging, compared with foreign companies, China's phosphorus compound fertilizer does not have much cost advantage. In this case, the 2% tax rate reduction will have a very limited effect on the export of phosphate fertilizers, and will not change the pattern of supply exceeding demand in the phosphate fertilizer market.

Li Changxia, the head of the sales department of Shandong Hongri Arkang Chemical Co., Ltd., made it clear that the implementation of the “plan” will have little impact on the compound fertilizer market. Due to the fact that China's export of potash fertilizer is inherently small, regardless of ad valorem or tariff collection, the impact on the potash market is not great. In addition, in North America, fertilizer facilities are being restored or newly built in North America, and traditional fertilizers such as Vietnam and India are being used. In the case that the target countries for export are all producing fertilizers next year, the international fertilizer market is expected to be difficult to be optimistic. Even if Chinese companies reduce their export costs due to the implementation of the “plan,” they still cannot export in large quantities. The fertilizer companies need All kinds of raw materials will still be adequately supplied, and the current market structure will not change.