2010 Fertilizer Industry Market Trend Forecast

2010 Spring nature catastrophe affected the general sales of fertilizer

, on the one hand delayed the spring planting season, about 20 days, killing off the urea market cost increases situation, followed by further floods affected the southern urea sales.

In the second half year, the cost of urea is expected to rise, chiefly reasons as following:

(1) taking in to account the cost support, currently urea prices is fundamentally bottomed out; (2) urea new capacity reached 4.13 million tons, so urea production in 2010 is not incremental; (3) to think about the cost, the export of urea in the second half will be better than the first half year; (4) food prices increase are expected to stimulate the enthusiasm of farmers to increase fertilizer; (5) the effect of higher gas prices will gradually appear.

Our understanding of urea industry: (1) unless the future of international natural gas prices sharply higher, due to capacity and demand dispute, the future cost fluctuations around the cost line of 1600 more likely, in 2011, urea prices may be periodically break 1,800 yuan / ton; (2) urea appear industry great opportunities there needs with exports, taking in to account the cost support, they think natural gas prices off-season 5 dollars / mmbtu can improve the industry conditions. According to the current gas cost and the international urea prices, they think that the international urea cost increase is limited.

Diammonium

Diammonium in first half of 2010 exports of 748,000 tonsl, decreased 4.3% year on year; close by the finish of May the national supply and promotion technique information, diammonium stock 1.81 million tons, up 41.0% year on year.

Diammonium prices fluctuated frequency, its demand is also influenced by the prices volatility and unpredictable. The industry believes that the fall fertilization, and fertilizer market in the spring of 2011, diammonium prices likely to stay stable.

Diammonium production and sales market will even be balance. The industry specialist also believes that the second half of 2010 diammonium production capacity will be reached 2.5 million tons, even if not in full production beginning, but market psychology impact greater; weather uncertainty factors is great, which is worth to concern.

Potash Fertilizer

Potash fertilizer gap is still existt. China's potash fertilizer production capacity in 2009 reached 3.9 million tons, production reached 3.21 million tons, respectively, increase 29%, 22%, domestic consumption of potash fertilizer in 2009 was 6.04 million tons, release all the domestic potash production capacity to compare, the domestic potash fertilizer still has three million tons gap.

The industry specialist believes that potash fertilizer prices to stay stable and gradually rising trend in short-term, and in October potash fertilizer is expected to have greater improvement.

by: Amanda Xia

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