Nowadays the value of urea is low, but from the data available to the author, the form is not optimistic, and the export situation is obviously less than the same period last year. Perhaps at the beginning, there are still many traders who are eager to have as much as 703 million tons of exports this year. However, after the window period has passed two months, the situation has not improved. At this time, all sectors of the industry began to question the urea export. According to the author's analysis, the reasons are roughly divided into three points: First, the government has increased the control over urea exports, added a margin on the basis of 7% off-season tariffs, which has raised the export threshold; second, the international urea price Relatively low, China's urea in Ukraine, the Middle East and other competitors in front of the lack of competitiveness; Finally, a deadly point, the international market has found a substitute for urea exports, that is, nitrogen and phosphorus binary compound fertilizer.
As a compound fertilizer containing nitrogen and phosphorus, it has the dual advantages of price and policy in export. The price is not difficult to understand, mainly monoammonium phosphate, ammonium chloride as raw material, the ratio of 20-20-0. From the content point of view, the average cost is lower than urea, which has a price advantage. At the same time, the annual implementation of export tariffs of 7% has created huge export profits for dual-fertilizer. Based on the above two points, China exported a total of 723,000 tons of nitrogen and phosphorus fertilizers in the first half of the year, an increase of more than four times year-on-year. From the following figure, we can see that in the second quarter of last year, the export volume of dual-element fertilizer in one month did not exceed 50,000 tons, but in June this year it reached 300,000 tons. Moreover, according to the author's understanding, the export volume in the third quarter will be only a little more.
First of all, from the trade point of view, the export of binary fertilizers only imposes a 7% tariff. Second, from the point of view of nutrient content, its own nitrogen and phosphorus elements, although the 20-20-0 nitrogen, phosphorus, potassium formula is less than the nitrogen content of 46.2% of urea can not keep up with phosphorus 55% of the diammonium phosphate, However, urea and ammonium phosphate were added with higher margins, and it was difficult to see profits from exports. From the analysis of tariffs and content, dual-fertilizer is a good substitute for countries that need to import both urea and ammonium phosphate. For example: India and China have signed more than 1 million tons of binary fertilizer import orders, and the Indian government has also increased the import subsidy policy for dual fertilizer. From this it can be seen that alternative imports have been recognized by the market.
In addition, compared with domestic urea trade in the first half of the year, exports from January to June were only 680,000 tons, a decrease of 55% year-on-year. Moreover, international urea prices have not risen sharply because of the reduction in China's exports, but have continued to consolidate at a low level in the past month. This is a good proof that the international market is reducing the demand for urea. During the year, India had already conducted two urea bids and the result was not satisfactory. Traders need relatively low FOB prices, and Chinese urea companies are difficult to provide due to tariff pressures. Faced with the dilemma of urea exports, those importing countries have to find ways to deal with China's high tariffs.
Judging from the form of trade in the past two months, China’s urea export volume has decreased significantly, while the dual-fertilizer has increased significantly. Faced with the current status of exports, we cannot say that traders have drilled the "empty" of tariffs, but can only say that profits determine market demand. However, even if the industry realizes that the tariffs on the export of dibasic fertilizers should be adjusted early, it seems that the government has not made any explicit explanations on this. Therefore, in the short-term, the export of dual-fertilizer is still optimistic about, and may be a greater degree of replacement of urea exports.
Tuofang Metal Product Co., Ltd. , http://www.hsfieldfence.com