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This is the first policy loosened in specific industries since the Ministry of Industry and Information Technology released the “Enforcement of Energy Saving and Emission Reduction†in the third quarter of this year. Constrained by the impact of energy conservation and emission reduction, the nation's urea industry has seen the most severe output shrinkage in 15 years, with output falling by 18% year-on-year in October.
Electricity curtailment leads to a reduction in fertilizer production Wang Xiaolei has been looking forward to the end of the "injunction." His Tianji Zhonghua Gaoping Chemical Co., Ltd. is an important fertilizer production enterprise in Shanxi Province. Normal urea production during the month is about 60,000 tons, but currently only 30,000 tons of equipment can be produced.
In the past few months, the supply of electricity has been intermittent and it has been difficult to guarantee production. At the same time, anthracite is also relatively tight and has not been bought before. "Although the iron and steel industry is relatively less power-consuming compared to the iron and steel industry, it is also a power-consuming enterprise in comparison with the general industry." Wang Xiaolei said.
The reporter was informed that at present, Shanxi, Shandong, Henan, Hebei, and other fertilizer producing provinces, there are different levels of power curtailment, which has a greater impact on the local production enterprises. This makes the fertilizer production this year may not be as expected.
Shanxi is experiencing a serious power shortage. According to the data from the power sector, the province’s largest electricity load this year reached 17.32 million kilowatts. The province’s electricity supply is clearly insufficient. The maximum power gap is more than 3.2 million kilowatts. It is estimated that the power supply gap will reach 5 million to 6 million kilowatts by the end of the year. The gap accounts for 20%-25% of the total electricity demand.
The province has currently adopted measures to limit the use of electricity in various provinces and cities. High-energy-consuming enterprises have been affected greatly, which has spread to fertilizer companies. Taking Sinochem Sinochem as an example, its annual chemical fertilizer production is generally over 700,000 tons, but as of now there are only 400,000 tons, and even if it is fully developed in the last month, it can only reach 500,000 tons, compared with last year. Will greatly shrink.
In fact, similar situations exist everywhere. In October, Shandong’s urea production was 313,085 tons, a year-on-year decrease of 12.8%; Henan’s production was 174,027 tons, a decrease of 33.6%; and Shanxi and Hebei’s urea production both decreased by approximately 40%.
The above four provinces accounted for half of the country's urea production, and their output decreased, resulting in a negative year-on-year growth of urea in the country for six months.
Although the country may adopt new tariff measures on exports in December, and will increase productivity, it may not be optimistic about the fertilizer supply situation in the spring of next year. "Now we look at the state's regulation, but the situation is far less favourable than in the first quarter of this year. This may have a certain pressure on the rise in the prices of agricultural products." Xu Hongzhi said.
The situation of potash fertilizer and phosphate fertilizer is slightly better, but overall, the overall supply and demand situation of the fertilizer industry is not optimistic.
Or push up the price of agricultural products next year As chemical fertilizers account for a relatively large proportion of the production costs of agricultural products, the tight supply situation of chemical fertilizers or the prices of agricultural products will be affected next year. At present, fertilizer accounts for the second largest share of the cost of food and vegetables, second only to labor costs. In grain production, the proportion of fertilizer costs is 21%, which is higher than 18% of land cost, 15% of machinery and other costs, and also higher than 5% of seed cost, and only lower than the artificial 32%.
In the cultivation cost of vegetables, the proportion of the cost of chemical fertilizers and farmyard fertilizers is 18%, which is also only 40% lower than the labor cost and higher than the proportion of costs such as pesticides and land.
Since the beginning of this year, the price of vegetables has risen by about 30%, driving the price of agricultural products to rise by 10%, resulting in the CPI (residential consumption increase) reaching a new high of 4.4% in October. If the cost of chemical fertilizers is still difficult to reduce next year, CPI is also expected to be affected.
It is expected that the labor costs will continue to increase significantly next year. Coupled with the reform of the resource factor price, the cost of agricultural production materials may further increase significantly. These factors will promote a significant increase in food prices. In the absence of large-scale food production cuts, taking into account major factors, it is expected that the average price increase for food next year will be between 10% and 15%, and the corresponding CPI is expected to be around 4.4% year-on-year. If the global food production is significantly reduced, domestic food prices rose more than 15% or even reached 20%, coupled with inflation expectations brought non-food prices to increase, then the CPI may exceed 5% year-on-year.
Some analysts believe that the next step in state regulation and control may increase the role of export restrictions and thus ensure the supply of domestic fertilizer. "But no matter what, it is necessary to speed up production now. The situation like potash fertilizer is better, and it is related to the main production areas in Qinghai and other places, and it is not so serious for companies to restrict production," he said.
At present, the price of urea is 2,000 yuan per ton, which is 30% higher than the lowest point of this year, 1,500 yuan per ton. At the same time, the price of potash fertilizer and phosphate fertilizer is also at the level of 3,000 yuan/ton, although it has not reached the highest level in 2007, but it is not low.
The Ministry of Industry and Information Technology has stopped some industries to limit electricity
On November 29, the Ministry of Industry and Information Technology issued a notice requesting the strengthening of the coordination of operational factors, meeting the normal production energy use and transportation needs of enterprises, ensuring the normal production and use of electricity by fertilizer companies, and guaranteeing the normal production of electricity for sugar-milling enterprises and the use of diesel for sugar cane transportation. Pull off power.