In the era of overcapacity, there is a sharp increase in the risk of light fertilizer storage.

In the continued sluggish market, fertilizer once again reached the light storage season. Recently, entrusted by the National Development and Reform Commission, Guoxin Tendering Group Co., Ltd. announced the 2010/2011 annual off-season commercial reserve of chemical fertilizers, referred to as the tender for “light storage” storage enterprises, and announced that the 2010/2011 year will have a storage capacity of 10.25 million tons. Reserve 700,000 tons. The pale-storage policy began in 2004, when the state granted ** interest subsidies to successful bidders, which once aroused corporate enthusiasm. However, insiders pointed out that in recent years, the overcapacity of chemical fertilizers has been severe, and the market has been volatile. The subsidy preferential policies are far from market risks, and many companies have lost tens of millions of yuan due to light reserves. Even more people in the industry have suggested that in today's era of overcapacity, it is no longer necessary to save fertilizer.

This year's storage companies benefit from this

A few days ago, the head of the marketing department of a large-scale nitrogen fertilizer production company in Shandong stated that during the three-year light storage period of the successful bidder, only profits were made in 2007, and in the following two years, the high-priced storage fertilizers were sold at a low price, resulting in heavy losses. “This year, the company has lost tens of millions of dollars.” Liu Bin, general manager of Heilongjiang's Beifeng Group, also revealed that this year the group has retained more than 600,000 tons of national and provincial fertilizer commercial reserves, but due to the cold weather in the northeast, fertilizer sales As the period was postponed, the related financial expenses of the company increased, and due to the serious oversupply of fertilizer, the price dropped all the way, losing 78 million yuan. In fact, due to the unusual sluggish fertilizer market this year, almost all the fertilizer and light-storage companies have suffered losses. According to a survey conducted by the China Association of Agricultural Resources Circulation, the price of urea, which accounts for half of the total reserves, has been declining since the beginning of this spring. The larger the company’s storage capacity, the greater the losses. According to statistics, during the period of light storage, the purchase price of urea was 1,736 yuan/ton, and the average selling price was 1,748 yuan/ton, plus a storage and storage cost of about 6 months, the loss per ton was about 100 yuan or 8 million tons. The loss of stored urea has reached more than 600 million yuan, and the remaining price has been inverted, with a potential loss of 1.2 billion yuan. Diammonium and compound fertilizers have also encountered similar situations, and there have been inversions in the purchase and sales prices. According to preliminary estimates, the total loss of light storage companies may exceed 2 billion yuan. After this year's big losses, this once-competitive competition, even questioned by the existence of unfair competition, has rapidly cooled down. According to a staff member of the Guoxin Tendering Group Co., Ltd. responsible for the bidding business, although the announcement was only released a few days ago, it was unclear how many companies participated in the bid, but it was certainly lower than the same period of last year.

Sudden increase in risk due to excess capacity

This year's widespread loss of the reserve, undoubtedly has a great relationship with the climate anomaly. However, more people in the industry believe that the current major changes in the fertilizer market are the main reasons. “The pale storage policy was introduced in 2004 when the supply of chemical fertilizers was in short supply. As long as there was cargo, it would not be sold in the peak season. Nowadays except for potash fertilizer, other fertilizers are seriously overcapacity, and light storage of fertilizers may not be able to go smoothly in the busy season. "Sale." Tan Guihui, general manager of Guangzhou Sino-Norwegian Agricultural Assets Co., Ltd., who has been managing fertilizers for many years, said. According to statistics, the total urea output in 2004 was 41.815 million tons, and the total urea output in 2009 reached 55.46 million tons, an increase of 32.6% over 2004. In the first six months of this year, the cumulative total urea production was 30.88 million tons, and the growth rate Strong, it is expected that this year's output can reach or exceed 60 million tons; in 2004, the annual output of phosphate fertilizer was 10.17 million yuan and 100% P2O5. In 2009, the annual output was 14.697 million tons. From January to July this year, the national output of phosphate fertilizer was 9.134 million tons. Industry insiders estimate that the current excess production of urea and phosphate fertilizer exceeds 10 million tons. The rapid expansion of chemical fertilizer production has made the changes in fertilizer prices unordered while leading to the fact that lighter-storage fertilizers are difficult to sell in peak seasons. “In the past, everyone was rushing to bid for light reserves. In addition to obtaining discounts for the country, the main reason was that there was a large spread between the off-season fertilizer and the fertilizer purchase price during the peak season.” Many industry sources reported that the fertilizer prices are basically not light today. The peak season, and changes quickly, this makes it difficult for companies to grasp the trend of market prices during the period of winter storage, and the risk of light storage has therefore increased sharply. "The stock price of urea during the last winter storage was more than 1,700 yuan/ton, and the sales price of urea so far this year has been basically at 1,600 yuan/ton," said Tan Guihui. At the same time, the number of light reserves and companies are increasing. According to the statistics, only the national reserve for tendering has increased from 6.15 million tons at the end of 2004 to 16 million tons last year, and the storage and storage enterprises have expanded from more than 20 to more than 90, covering 29 provinces, cities and districts across the country. . In addition, many of the fertiliser distributors did not win the bid for the reserve, but most of them did so at their own expense. "So many companies are engaged in light storage, they are all concentrated in the off-season to purchase fertilizer. For manufacturers, the off-season will naturally become a busy season. How can we get cheap goods?" said Zou Ning, deputy general manager of Guangdong Tianhe Agricultural Materials Co., Ltd.

Is it necessary to light up the dispute?

Under the current market conditions, the more companies have more storage capacity, the greater the risk, and those large leading companies that have undertaken storage have also exerted tremendous pressure. Many people in the industry believe that nowadays fertilizer storage has already become a "chicken rib." "Now the reserve should be cancelled, and the excess production capacity is so serious that manufacturers and traders have a large inventory of inventory at any time and there is no need to worry that farmers can't buy fertilizer," said a senior executive of Shandong Rising Group. This view has also been recognized by many people. However, there are also many people who insist that light savings still exist. "If there is no enterprise to assume the light storage task, even in the period of excess capacity, there may be a phenomenon of supply is not demanded." A number of agricultural resources industry analysts, in the agricultural resources industry, buying up or not fall phenomenon is widespread, especially Under the situation of overcapacity, it is easy to see pessimism about the outlook of the market, which causes the enthusiasm of dealers to stock up. However, the busy season tends to be very short. If there is no light reserve company to reserve in advance, it is easy for the regional fertilizer to be in short supply. This has led to an increase in the price of chemical fertilizers that has harmed the interests of farmers. An official of the National Development and Reform Commission once explained the necessity of light storage to the media: “Most large-scale chemical fertilizer production enterprises in China are located in the underdeveloped regions of the southwest and northwestern agricultural economy, while the hypertrophy provinces are located in the east, north, and south regions of the country; Tight rail transportation can only meet about 45% of domestic cargo transportation. Therefore, if we want to meet the market supply in the peak season and achieve effective docking between annual fertilizer production and agricultural seasonal supply, we must make a good reserve in advance.” “Light storage is still necessary, but The state needs to increase subsidies.” Zou Ning said that the current fluctuations in fertilizer prices, such as urea, are fluctuating at prices ranging from RMB 50 to RMB 100-200 per ton, and the cost of storage is also increasing year by year, but subsidies However, there has been no corresponding increase in efforts, which has caused the company to suffer a serious setback in confidence. "We are still bidding this year, but this is due to our responsibility as a provincial leading circulation company."