Due to the Influence of Environment Examinations on Urea Producers Using natural Gas as a Raw Material and Coal as a Raw Material, Urea Output in the Fourth Quarter Would Go Down Greatly

By CnAgri2018-11-09 11:29:50 Print Zhengzhou Along with the coming season of heating, the pressure from environmental examinations is increasing. Influenced by limitations on natural gas and shifts on production, urea producers all would be influenced, whether urea companies using natural gas as a raw material or urea companies using coal as a raw material. Along with a fall in operating rates, urea output in the fourth quarter would go down greatly.
In middle September, PetroChina Ningxia Petrochemical’s and PetroChina Tarim Oilfield’s urea equipment stopped production because of limitations in natural gas. It was reported that the policy of production suspension for three months and limitations on production for two months would be carried out in the southwest. Namely, from November 2018 to March 2019, urea production would be stopped for three months and a limitation of 30% supply of natural gas would be proceeded in the remaining two months. The producers take turns to stop production during that period. Last year, the time of production suspension of urea companies ranged at 50-90 days. It means the time of production suspension this year would be 3 months. With the addition of limitations on production, the output of urea companies using natural gas as a raw material would be influenced.     
Although the capacity of domestic urea companies using natural gas as a raw material only accounts for 20%, yet urea production using coal as a raw material also would be influenced by production limitation. Industrial companies in “2+26” cities: Beijing, Tianjing, Hebei and their surroundings would continue to carry out the plan of shifts on production this winter, and many urea producers would be influenced. In 2017, urea output in Hebei, Henan, Shandong and Shanxi accounted for 43% of the national total urea, so urea production in these four provinces brings relatively great influence on supply in the domestic. According to data from BOABC, during January- September 2017, the average monthly output of urea in Hebei, Henan, Shandong and Shanxi was around 1 million MT (nutrient, same below), and then went down to 0.858 million MT in December, after the end of heating, it rebounded to the level of 1 million MT again. Based on latest statistics, urea output in these four provinces in September 2018 totaled 0.921 million MT. Influenced by shifts on production, the monthly urea output would be less than that in the same period of last year. 
Along with the continuing of environmental examinations, limitations on natural gas in the southwest and shifts on production in some areas of north China, urea capacity would be restricted in the next three months, and the monthly output of urea would continue to maintain at a relatively low level.