Overview of the compound fertilizer market in 2015

The performance of the compound fertilizer market in 2015 was unsatisfactory.
Although the profit margin of the industry has increased slightly, the difficulty of business operations has increased significantly.
Although the price trend is relatively stable, market demand has been sluggish for a long time.
The performance of the market in 2015 once again confirmed that compared with elementary fertilizers, the variety and price advantages of compound fertilizers have been weakened.
In order to get out of the predicament, compound fertilizer companies have also made many new explorations.
In the face of the domestic market, companies have not only increased their own innovation, but also made a fuss about the extension of the industrial chain, and many successful cases of cross-border integration have emerged.
At the same time, the national "One Belt One Road" strategy has opened another door for enterprises, with more enterprises going abroad, learning experience, introducing technology, and expanding markets.
Industry: Profits increased slightly, operating difficulties In 2015, the profit margin of the compound fertilizer industry increased slightly, but faced with the impact of overcapacity, channel changes, environmental protection upgrades and other factors, the low peak season of products and the difficulty in rising prices have become the norm in the industry, and companies generally feel operating difficulties .
According to statistics from the China Phosphate and Compound Fertilizer Industry Association, the profit of the compound fertilizer industry in 2015 was 24.
67 billion yuan, a year-on-year increase of 23.
2%.
The industry's main operating profit rate was 5.
35%, a slight increase from 3.
99% in the previous year.
The average price is lower.
In 2015, the average ex-factory settlement price of ternary compound fertilizer (various nutrients) was 2,164 yuan/ton, a year-on-year decrease of 87 yuan/ton.
At the same time, investment in the compound fertilizer industry is still increasing.
Large enterprises have accelerated their deployment and approached the market for new installations.
From the statistics of the association, the annual production and sales volume of compound fertilizer increased slightly year-on-year, and the annual production-sales ratio was 98.
7%.
The total output of the top ten enterprises in 2015 was 21.
257 million tons, accounting for 56.
9% of the association's statistical output, an increase of 4 percentage points year-on-year, and the industrial concentration of the compound fertilizer industry increased.
In 2015, compound fertilizers actually completed an investment of 61.
62 billion yuan, an increase of 13.
3% year-on-year.
There were 656 construction projects, a year-on-year increase of 1.
4%.
485 new projects were opened, an increase of 8.
3% year-on-year, and 5.
1 projects were completed, a year-on-year increase of 12.
8%.
Behind these optimistic industry data, most compound fertilizer companies feel that it is more difficult to operate.
At the Standing Council of the China Phosphate Fertilizer Industry Association held recently, a large compound fertilizer company revealed that although the company's business indicators have achieved steady growth, the overall feeling is that the difficulty of operation has increased.
This feeling was particularly prominent in the second half of 2015.
In order to seize the market, the company has repeatedly advanced the sales time, and the incentives for dealers have become more generous.
Market competition forces companies to increase investment in marketing, which makes many small and medium-sized companies feel more pressure.
In October 2015, the fertilizer season in the Central Plains was not over yet.
The reporter visited the Henan market and found that many small and medium-sized enterprises held customer meetings in advance that should be at the end of the year.
A person in charge of a company told reporters that the sooner you act, the sooner you can catch customers.
Even so, business operations can only barely maintain at the original level.
In addition to traditional problems such as overcapacity and market competition, some new difficulties emerged in 2015.
For example, cancellation of preferential policies.
In addition to the cancellation of preferential rates for freight, gas, and electricity, the most representative one is the resumption of the fertilizer value-added tax in September.
According to estimates, the actual tax rate for compound fertilizers is 1.
5%-2.
5%, tax 38-63 yuan per section (based on the ex-factory price of 2500 yuan/ton), the production cost will increase.
In addition, the national food policy adjustment, as well as the decline in agricultural product prices, changes in planting structure and other factors have put pressure on the compound fertilizer industry.
Price: stable before falling Lack of support The price trend in 2015 is stable and then fell.
The main turning point occurred after October, and the main reason for the price decline was the lack of support.
The characteristics of each sales season are as follows: In the traditional spring plowing sales season, the price of compound fertilizer did not rise accordingly.
There are three main reasons that restrict the market's rise.
First, the raw material market is sluggish, and the cost of compound fertilizer has not been significantly supported.
Urea prices did not show a rebound until mid-March and missed the sales season.
Domestic and foreign demand for monoammonium phosphate is flat, and prices are consolidating at a low level.
Although the price of potash fertilizer has risen slightly, it is not enough to support the price increase of compound fertilizer.
In March, the raw material market recovered, and some companies tried to increase their quotations, but the difficulty in receiving orders increased, and price adjustments encountered resistance.
Second, although the demand is concentrated, but the supply of goods is sufficient, the market will not see the price increase caused by the shortage of supply.
Third, the new tariff policy is still being digested during the spring plowing period, and its impact on the market has not yet appeared.
The increase in summer market benefits drove a slight increase in prices.
May ushered in the peak sales season.
Under the influence of multiple favorable factors such as demand and cost, compound fertilizer ushered in the first round of stable and medium price increases, and the price rebounded by nearly 100 yuan.
The good situation has been maintained until the end of sales in mid-June.
The price increase benefited from the combination of four positive aspects.
First, the market confidence accumulated under the steady spring market is released at this time, and the market mentality is improving.
Second, since the beginning of the year, prices have remained low and stable for a long time, leaving a certain amount of space for the peak season to rebound.
Third, May is the peak season for fertilizer for summer sowing, and the time and area of ​​demand are concentrated.
Fourth, the urea market rebounded.
The demand for compound fertilizer in summer is mainly concentrated in maize fertilizer in North China, and it is dominated by high nitrogen nutrient content.
The price linkage between compound fertilizer and urea is strong.
Driven by the summer market, the autumn market started ahead of schedule.
The summer and autumn seasons coincide with price increases.
As soon as the high-nitrogen fertilizer sales season passed in early June, many companies couldn't wait to invest in autumn collections, and the market started the autumn war ahead of schedule.
The collection is completed ahead of schedule to lay the foundation for a stable autumn market.
After October, prices began to decline slowly.
On the one hand, the annual demand has entered the off-season, on the other hand, the raw materials have fallen, and costs lack support.
Market confidence was severely damaged, and winter storage has been delayed.
This influence spread until the beginning of 2016.
According to estimates, as the largest winter storage market in Northeast China, less than 30% of the goods arrived before the Spring Festival in 2016.
On the whole, the stable market for compound fertilizers in the first three quarters was mainly supported by market demand.
In the fourth quarter, neither demand nor raw materials were good, and price cuts became inevitable.
Countermeasure: Industry Extension Faced with the sluggish market when going abroad, companies did not choose to fight for prices, but to find another way.
In 2015, compound fertilizer companies are eye-catching in two directions: one is to extend the industrial chain, and the other is to accelerate the pace of internationalization.
Unlike previous unilateral innovations in products, channels, and marketing, the transformation of the company in 2015 has been extended to the entire industrial chain.
E-commerce of agricultural materials and cross-industry cooperation have become new focal points in the process of enterprise transformation.
In 2015, the investment in e-commerce by agricultural enterprises was almost barbaric growth.
Among them, there are many companies that produce and distribute compound fertilizers.
In April, Xindu Chemical used its own (self-raised) currency funds to invest 180 million yuan in the establishment of Chengdu Haha Farm E-commerce Co.
, Ltd.
, to create an e-commerce model with the two-way circulation function of "agricultural materials products going to the countryside and agricultural products going to the city" .
In the same month, Huili Agricultural Resources Chain also established its own rural e-commerce platform-Huili.
com.
In addition to providing low-cost fertilizer sales, it also aims to create agrochemical experts in farmers' pockets.
In June, the Nongshang No.
1 launched by Kim Zhengda and others was launched, which is known by the industry as the largest e-commerce platform for agricultural materials in China.
Cross-border cooperation has become a bright spot.
Liu Guo Chemical and Dunhuang Seed Industry have cooperated with each other, and the service trial demonstration of "good fertilizer + good seed package" has achieved good results in Northeast, Northwest, Anhui, Henan, Shandong, Hebei and other regions.
Batian shares and Shenzhen DJI Innovation Technology Co.
, Ltd.
signed a strategic cooperation agreement, the two parties will explore the establishment of "agricultural drone application system.
" The 18 leading companies in the chemical fertilizer, pesticide, seed, agricultural machinery, and rice industries under Zhongnong initiated the establishment of the country’s first comprehensive agricultural-related enterprise joint professional rice cooperative, from centralized procurement of seeds, pesticides and fertilizers to mechanical farming, mechanical planting, Machine collection, machine drying, provide one-stop service.
The introduction and export of products has been the main form for the compound fertilizer industry to participate in international competition for a long time.
In 2015, 1.
462 million tons of ternary compound fertilizers were imported, a year-on-year increase of 31.
9%, while prices fell by 2.
2% year-on-year.
In the whole year, the export of nitrogen and phosphorus binary fertilizers was 856,000 tons, a year-on-year increase of 10.
9%, and the export price increased by 6.
5%.
It is worth noting that in 2015, a 5% export tariff for nitrogen and phosphorus binary fertilizers was implemented throughout the year, and the overall tax rate was lowered, but it did not stimulate a significant increase in exports.
In 2015, there will be more and more international cooperation on the technical level of compound fertilizer companies.
Following the strategic cooperation between Kingenta Group and the Israeli Livnat Group in June 2014, which kicked off the Israeli-Chinese innovative agricultural technology cooperation, in April 2015, this company once again organized an Israeli modern agricultural technology exchange and training mission to go deep into the desert oasis.
, Learn Israeli modern agriculture and water and fertilizer integration technology.
Some companies have done their brand promotion abroad and are committed to building international brands.
In October 2015, Stanley's compound fertilizer promotional video appeared in Times Square, New York, Show the world the power of the Stanley brand.
On the road to internationalization, in addition to leading companies, some emerging compound fertilizer companies also follow closely behind.
In September 2015, representatives of the Disco Group were invited to visit Amir Marketing and Agricultural Investment Co.
, Ltd.
located in Haifa, Israel, and reached a strategic cooperation agreement in the field of high-end fertilizers.
In addition, news of companies going to Taiwan, South Korea, Southeast Asia and other neighboring countries and regions to exchange experiences and learn from them frequently appears.
Xinlianxin Company and BASF of Germany exchanged visits for three consecutive times during the year, and reached cooperation on the introduction of new technologies and products.
Trend: The market outlook is under pressure Working hard to transform At present, the compound fertilizer market is still chilling.
The mainstream quotation still continues to the winter storage level, but the actual transaction quotation has lost its reference significance, and the compound fertilizer manufacturer has launched a price game.
The quantity of arrivals in various places has decreased significantly, with less than 40% of the arrivals in the Northeast, and fertilizers for spring farming in North China and East China are still waiting to see.
It is difficult for enterprises to collect payments and high inventory pressure.
Compound fertilizer in the spring ploughing market faces three pressures: First, the overall decline in raw material prices, it is difficult to support the price of compound fertilizer, and aggravates the wait-and-see sentiment of the market.
The price of urea fell to a 10-year low, and the low price dropped to RMB 1,220 to 1,280; the inventory of monoammonium enterprises remained high, and the low price dropped to RMB 1,700; there were many sources of potash fertilizer, the quotation was chaotic, and the demand was low.
Second, low prices of agricultural products affect farmers' inputs.
After the holiday, the prices of the three staple foods of corn, rice and wheat have fallen, and farmers are reluctant to sell them.
The third is that the adjustment of planting structure affects the demand for fertilizer.
In the short term, the compound fertilizer market is unlikely to be favorable, and the price is expected to remain sluggish.
For traditional compound fertilizer companies, transformation is imperative, but in which direction and how? The main point of view in the industry is that in the future, the main direction of the company's efforts will be in three aspects: product innovation, the extension of the entire industry chain, and the development of international markets.
Xu Dongkui, deputy general manager of Anhui Liuguo Chemical Co.
, Ltd.
, believes that product innovation should lock in two directions: First, develop safe, efficient, and environmentally friendly new fertilizers.
The second is to form an effective combination and precise fertilization.
We must pay attention to the whole process of crop nutrition and promote precise fertilization.
After a year of exploration and experimentation, companies are thinking more rationally about agricultural materials e-commerce, and tend to use the Internet to enhance their service capabilities and competitiveness.
Chen Hongkun, vice president of Jinzhengda Group, believes that enterprises must integrate actuality in exploring e-commerce of agricultural materials.
Especially for agricultural material manufacturing enterprises, they should implement the "+ Internet" strategy, and use information technology to improve the efficiency of production, distribution and management, improve the level of quality control, and effectively do agrochemical services so that farmers can get real benefits.
The operation of these agricultural materials e-commerce companies still faces some problems or obstacles: one is the problem of infrastructure and talents, the second is the problem of logistics, the third is the lack of agrochemical services, and the fourth is that they cannot adapt to the current reality of credit sales.
Yang Caisong, director of the e-commerce business department of the village shopping model of Hubei Xinyangfeng Fertilizer Co.
, Ltd.
, aims to build a full ecological chain of "Internet + agriculture" in the future.
In a nutshell, it is necessary to build an agricultural closed loop through the downward flow of agricultural materials and the upward flow of agricultural products.
In this system, two core channels of information and logistics will be realized, and the integration of agricultural materials sales, agricultural product sales and data centers will be used through three platforms.
The planting plan helps farmers solve the problems of how to grow and sell that they are most concerned about.