Owing to Serious Overcapacity, Fertilizer Companies Faced Operating Difficulty and Closed Down in Large Quantities

By CnAgri2017-04-27 09:18:18 Print

Currently, the degree of fertilizer overcapacity has reached 90%. Due to cutthroat competitiveness, domestic small and medium fertilizer companies can’t maintain their operations and have closed down for a long time.

Taking urea for example, according to statistics from BOABC, excluded exited capacity of 6.04 million MT and suspended capacity of 8.57 million MT, 2016 urea capacity recorded 97.157 million MT (product). The demand for urea was 72.816 million MT (product) in 2016. There was a surplus of 25 million MT.

On the premise of serious overcapacity, a weak demand from grass roots aggravates a drop in the prices of products, so the companies fell into serious loss. Urea prices had decreased greatly since last May, with a decline of more 180 RMB/MT. The average loss of urea production in Shanxi in 2016 recorded 89 RMB/MT, but the profits reached 59 RMB/MT in 2015.

Besides, domestic some special fertilizer producers, such as special fertilizers for vegetables and fruit, have been developing rapidly, in order to cope with the shocks of a downturn of fertilizer industry.