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China Nitrogenous Fertilizer Industry Accelerates Adjustment

Performance of China Nitrogenous Fertilizer Manufacturing Industry, 2007-2012

CRI report: According to the data in the end of 2012, among the total 71.30-million-ton production capacity of 393 urea enterprises, the production capacity of anthracite accounted for 50.5% and that of non-anthracite accounted for 18.5%. Moreover, the production capacity proportion of non-anthracite is gradually increasing. Along with nitrogenous fertilizer industry moving toward the regions where coal resources are rich, a batch of large advanced nitrogenous fertilizer manufacturing facilities are put into production in Mongolia, Xinjiang, Ningxia, Shaanxi, etc. According to statistics, urea production capacity is 3.44 million tons in Mongolia and the production capacity that is under construction or planned to be constructed is 9.36 million tons, which will reach 12.80 million tons by the end of 2015. In addition, urea production capacity is 5.06 million tons in Xinjiang and the production capacity that is under construction or planned to be constructed is 4.18 million tons, which will reach 9.24 million tons by the end of 2015. Performance of China Nitrogenous Fertilizer Manufacturing Industry, 2007-2012

Along with the increasing pressure on surplus production capacity, the nitrogenous fertilizer industry will enter a structure adjustment period again. 1. Production capacity increases rapidly, which trends to become increasingly large; 2.The production capacity of advanced coal gasification techniques with low cost rises extremely fast; 3. Urea production capacity in the resource regions like Mongolia, Xinjiang and so on increases sharply; 4. Some production capacities with lagging equipment and low management levels will be gradually eliminated. It is predicted that urea production capacity in regions where raw material resources are rich will reach 32 million tons by the end of 2013, accounting for 38.9% of the national production capacity.Performance of China Nitrogenous Fertilizer Manufacturing Industry, 2007-2012

Along with the constantly increasing urea production capacity in China, nitrogenous fertilizer enterprises are confronted with increasingly cruel competitions. As a result, the industry will be reshuffled inevitably. As to enterprises with resource advantages, thanks to the low production cost, advanced manufacturing techniques and good resource recycle, there will be more opportunities than challenges. Performance of China Nitrogenous Fertilizer Manufacturing Industry, 2007-2012

About 2/3 urea demanded in the northeast is bought from other provinces, which mainly came from Shanxi, Shandong and so on in the past. However, after the urea project in Mongolia is put into production, urea can be directly delivered to the northeast, which will inevitably impact the original urea supplying structure in the northeast. Under the situation that the transportation problem of urea with low cost is solved in Xinjiang, China domestic urea marketing structure will also be greatly influenced.Performance of China Nitrogenous Fertilizer Manufacturing Industry, 2007-2012

The major development direction of nitrogenous fertilizer in the future is that nitrogenous fertilizer marketing enterprises merge with each other to form joint ventures with capital as the link and that large-scale manufacturing enterprises and large-scale circulation enterprise cooperate with each other. Along with nitrogenous fertilizer industry moving toward the west where the resource is rich, nitrogenous fertilizer manufacturing regions become increasingly far away from nitrogenous fertilizer consuming regions. As a result, transportations and intermediate links will become increasingly important in ensuring nitrogenous fertilizer supply and stabilizing the nitrogenous fertilizer market.

Related research: Performance of China Nitrogenous Fertilizer Manufacturing Industry, 2007-2012