MIIT releases a notice regarding China’s fertilizer industry operation of H1 2012 and gives a forecast on supply and demand in H2 2012.

Keyword: stable, forecast, Industry and Information Technology
Publish time: 12th November, 2012      Source: CCM
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  China's phosphate fertilizer consumption seemed unlikely to catch up with the stable production growth in H2 2012, according to the forecast from China's Ministry of Industry and Information Technology (MIIT).


  On Sept. 10th, MIIT released a notice regarding China's fertilizer industry operation of H1 2012 and gave a forecast on the supply and demand market in H2 2012. China's phosphate fertilizer industry would see more imbalances between supply and demand in H2 2012, compared to H1 2012.  


  The notice showed that China's phosphate fertilizer industry witnessed the increasing output and decreasing profit in H1 2012. Coupled with nearly 3,000,000t/a new capacity of phosphate fertilizers entering into the market in 2011 and 2012 in succession, China's total output of phosphate fertilizers grew to 9.80 million tonnes in H1 2012, increasing by 18.3% year on year.


  Meanwhile, the rising prices of feedstock like phosphorus ore and sulfur greatly squeezed the margins of enterprises in H1 2012. China's overall phosphate fertilizer industry generated USD6.04 billion revenue and USD190.85 million profits in H1 2012, respectively increasing by 18% and decreasing by 33.1% year on year.


  Low operation rate drove up unit cost. According to the data from China Phosphate Fertilizer Association, the operation rate of DAP plants was 65% in H1 2012, versus 75% in H1 2011, while MAP and NPK fertilizers plants only operated facilities when receiving orders. Among China's 34 MAP producers, two of them had suspended the production and 11 showed negative growth in production.


  The notice also indicated that the development of China's phosphate fertilizer industry would become tougher in H2 2012. China's exports of phosphate fertilizers would draw to close in Sept. as low tariff period was about to end. Furthermore, although the demand for phosphate fertilizers would show seasonable uptrend in the coming autumn, it could still foresee the depression after autumn, especially when China's exports of phosphate fertilizers dropped sharply and a massive supply glut would occur in H2.


  In general, China's consumption volume in phosphate fertilizers was estimated to be around 8 million tonnes. The output of phosphate fertilizers in 2012 was expected to reach 17 million tonnes according to the conservative estimation. However, China's exports of phosphate fertilizers won't exceed 3 million tonnes in the whole year of 2012, indicating that domestic supply of phosphate fertilizers would approach 14 million tonnes, far more than the demand.


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  Market data: Price of Tris(2,3-dichloropropyl) phosphate;

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