Our reporter Zhao Xueyi and Cao Weixin
Trainee reporter Li Yucheng Meng Tingting
A "butterfly effect" caused by the increase in fertilizer prices is spreading across the entire industrial chain.
"The price of fertilizers has been rising since the beginning of the year. The price of urea in the second half of last year was 1,800 yuan/ton. After New Year's Day this year, it rose to 2,000 yuan/ton. In April and May, it rose to about 2,500 yuan per ton. 3144 yuan/ton. The price of urea has not been seen for more than ten years, and has hit a new high in nearly 10 years.” Mr. Li (pseudonym), the relevant person in charge of a listed plantation company, sighed in an interview with a reporter from the Securities Daily.
The increase in the price of chemical fertilizers is mainly affected by a combination of factors such as the promotion of production costs and the transmission of international markets.
While the price of chemical fertilizers is rising, the demand for crops and farmers' enthusiasm for planting in the lower reaches of the industrial chain are increasing.
For listed companies, due to the different positions in the industrial chain, the impacts are also very different.
Our reporter's investigation found that rising fertilizer prices may successfully transfer the cost increase of related fertilizer manufacturers, but pressures such as rising raw material prices and insufficient supply have led to a reduction in the workload of related fertilizer manufacturers.
Chemical fertilizers are expensive and out of stock, and fertilizer wholesalers have nothing to do, which ultimately puts more pressure on agricultural costs.
However, as national policies further regulate the balance of domestic fertilizer supply and demand, all problems are gradually being resolved, and relevant companies that have undergone a major reshuffle of the industrial chain are beginning to review their accounts again.
Fertilizer prices hit a record high
Related listed companies have strong profitability in the first three quarters
Since the beginning of this year, due to the comprehensive influence of many factors such as production cost promotion and international market transmission, domestic chemical fertilizer prices have risen rapidly, reaching a new high in the past ten years, and the unit prices of nitrogen fertilizer, phosphate fertilizer and potash fertilizer have increased by more than 30% during the year.
According to data from the National Bureau of Statistics, as of October 20, the national market price of urea (small pellets) reached 3,144.40 yuan/ton, and the price increase during the year was close to 64%.
According to data from Baichuan Yingfu, as of October 26, the average market prices of monoammonium phosphate and diamine phosphate reached 3345 yuan/ton and 3264 yuan/ton respectively, and the price increase during the year increased by about 64% and 39% respectively; potassium chloride The average market price was 3178 yuan/ton, an increase of about 59% during the year; the average reference price of potassium sulfate was 3979 yuan/ton, an increase of nearly 37% during the year.
Compound fertilizer also increased significantly.
As of October 15, the price of domestically produced ternary compound fertilizer monitored by the Ministry of Commerce reached 3,007 yuan/ton, and the price increased by more than 20% during the year.
As of October 26, the average market price of sulfur-based compound fertilizer and chlorine-based compound fertilizer monitored by Baichuan Yingfu has increased by more than 40% during the year.
On October 20, at a press conference of the National Development and Reform Commission, Meng Wei, deputy director and spokesperson of the Policy Research Office of the National Development and Reform Commission, said that due to the comprehensive influence of factors such as the promotion of production costs, the transmission of international markets, and low social inventories, Domestic fertilizer prices have risen rapidly this year, reaching a new high in the past decade.
The price of domestic chemical fertilizers has increased significantly, which has adversely affected farmers' enthusiasm for growing grain and safeguarding national food security.
According to the latest statistics from the Securities Daily, as of now, there are 25 A-share listed chemical fertilizer companies in China, covering a variety of fertilizers such as potash, nitrogen fertilizer, phosphate fertilizer, and phosphorus chemical and compound fertilizer. Among them, 4 are potash fertilizer companies and 5 are nitrogen fertilizer companies. , 7 phosphate fertilizer and phosphorus chemical companies, 9 compound fertilizer companies.
Affected by the imbalance between supply and demand of potash fertilizer, the price of nitrogen fertilizer, phosphate fertilizer, and compound fertilizer rose sharply, the demand for crops and the increasing enthusiasm of farmers for planting and other factors, the profitability of listed chemical fertilizer companies in the first three quarters was strong.
As far as potash fertilizer companies are concerned, according to the third quarter report of 2021 disclosed by four companies including Zangge Holdings, Salt Lake Co., Ltd., Potash International, and Sanfu Co., Ltd., the four potash fertilizer companies achieved non-net profits in the first three quarters of this year. There are three companies with positive growth and non-net profit growth of more than 200% year-on-year. Potash International ranks first with a year-on-year growth rate of 2051.05%.
Regarding the reasons for the substantial increase in non-net profit, the aforementioned companies all stated that the sales price of potash fertilizer, their main product, increased significantly compared with the same period of the previous year, the sales performance of potash fertilizer products increased, and was affected by the increase in commodity prices. During the reporting period, potassium chloride products Caused by factors such as price increases.
Potash International, located in Guangdong, is one of the leading listed companies in the production and supply of potash fertilizer. It has an existing potash fertilizer production capacity of 250,000 tons/year. It is also launching a 750,000 tons/year expansion project while upgrading its quality. It is expected to be completed in 2021. The formation of an international standard crystal potassium chloride scale of 1 million tons/year.
In the first three quarters of this year, Potassium International achieved operating income of 439 million yuan and non-net profit of 89.378 million yuan, a year-on-year increase of 53.14% and 2051.05%.
The company said that it was mainly due to the year-on-year increase in the operating income of the potash fertilizer business. At the same time, the international potash fertilizer prices rose, and the sales of potash products improved compared with the same period in 2020.
"The economic recovery rebounded strongly. Among the three elemental fertilizers, the demand for potash fertilizer has the fastest growth rate, and there are fewer newly explored minerals. The growth rate of supply is not as fast as the growth rate of demand. And the inflation caused by the over-issuance of currencies in various countries around the world have comprehensively affected the increase in potash prices.” The relevant person in charge of Potash International told the reporter of Securities Daily that in the next five years, the growth rate of potash fertilizer supply will be much slower than the growth rate of demand, and it is in the middle. The long-term supply is under-demand, combined with the vital impact of potash fertilizer on global food security, potash fertilizer prices will continue to maintain a high boom.
Xingfa Group, the leader in the domestic phosphorus chemical industry, achieved revenue of 16.58 billion yuan and non-net profit of 2.606 billion yuan in the first three quarters of this year, an increase of 8.93% and 634.66% year-on-year respectively. The average selling price of its main product, ammonium phosphate, increased by 51.58% year-on-year. The prices of the main raw materials used in fertilizer production have also increased to varying degrees in the first three quarters of this year. Among them, the prices of sulfur, sulfuric acid, and liquid ammonia have changed significantly, while the average purchase prices of corresponding raw materials are 1377.76 yuan/ton and 586.27 yuan/ton respectively. , 3219.09 yuan / ton, up by 136.61%, 353.7% and 41.63% year-on-year respectively.
The secretary of the board of directors of a listed nitrogen fertilizer production company in Sichuan revealed to the "Securities Daily" reporter that "the substantial increase in the company's net profit in the first three quarters of this year was due to the increase in prices and sales of its main fertilizer products such as nitrogen fertilizer and compound fertilizer."
"At present, affected by the off-season demand and limited agricultural reserves, the tight supply situation will be suppressed in stages, but the low enthusiasm of distributors for winter storage means that low inventories in the fertilizer market will always exist, and winter reserves are limited. As well as the limited operating rate of urea plants, it will help push up the domestic urea market in Mingchun." Facing the upcoming heating period, Zhongyu Information analyst Fan Jing said in an interview with reporters, "The supply of coal and natural gas is tight. The fundamental problem is difficult to alleviate in a short time, which has caused the low start of fertilizer companies. It is inevitable that fertilizer prices will run high this winter."
Higher upstream product prices
Increased cost pressure on nitrogen fertilizer companies
Part of the increase in fertilizer prices comes from top-down transmission.
CITIC Securities Research Report pointed out that due to global inflation and tight supply and demand, the price of bulk commodities has risen significantly, and the price of fertilizer raw materials has risen significantly.
Take nitrogen fertilizer as an example. Since the beginning of this year, the prices of coal and natural gas have risen rapidly, which has brought certain cost pressures to related nitrogen fertilizer companies.
According to the National Bureau of Statistics, as of the end of September this year, the national LNG market price has risen by about 129% year-on-year.
Wind data shows that compared to the same period last year, the Bohai Rim Thermal Coal Price Index rose by about 52% in October.
Hualu Hengsheng, which mainly covers nitrogen fertilizer and urea, pointed out in the first three quarters performance forecast that the price of urea products remained relatively high due to factors such as market supply and demand and rising coal prices.
Shengjitang, a major urea company, stated in an announcement that the company's urea sales price in the first three quarters of 2021 increased by 26.81% year-on-year, mainly due to the sharp rise in domestic and international coal and natural gas prices, which pushed up the cost of urea production.
At the same time, phosphate ore, sulfur, and sulfuric acid, the main raw materials for phosphate fertilizers, are also facing an upward trend.
According to data from Baichuan Yingfu, as of October 27, the average reference price of phosphate ore was 602 yuan/ton, an increase of more than 60% during the year.
According to data from Jinlianchuang, the price index of sulfur and sulfuric acid rose by about 123% and 137% respectively during the year.
In an interview with a reporter from the Securities Daily, Wang Chikun, an economist who understands the Institute, believes that the over-issue of the U.S. dollar has caused the actual depreciation of the U.S. dollar, resulting in a general increase in the price of commodities denominated in U.S. dollars, which is reflected in the country, including coal, natural gas, and phosphate rock. The prices of stone, phosphoric acid, etc. have all increased significantly, which is attributed to imported inflation.
In addition, the concentration of several factors affecting prices, such as insufficient inventory and production capacity, economic recovery, and rising demand, also has an impact on the rise of upstream commodity prices in the fertilizer industry.
The "Securities Daily" reporter found that based on the operating data of a number of listed companies involved in the upper reaches of the fertilizer industry in the first three quarters, in the context of high commodity prices, the prices of related products have also begun to rise.
The operating data of the first three quarters released by Hebang Biotechnology in Sichuan shows that the average price of the company's product ammonium chloride reached 761.36 yuan/ton in the first three quarters of this year, an increase of 46.56% over the same period last year, of which the price in the third quarter increased compared with the second quarter 30.17%.
It is understood that ammonium chloride is a nitrogen fertilizer in chemical fertilizers. In China, more than 95% of ammonium chloride is used for agricultural fertilizers, and more than 90% of them are used to make compound fertilizers.
Hebang Biological disclosed in the announcement that the average price of raw coal and natural gas in the first three quarters of the company's raw materials increased by 68.41% and 3.68% year-on-year, respectively, and the average price in the third quarter increased by 17.69% and 0.63% respectively.
Mo Rong, Secretary of the Board of Hebang Biological, said in an interview with the "Securities Daily" reporter: "At present, the company's ammonium chloride capacity utilization rate has reached more than 100%, and there is no possibility of expansion. Ammonium chloride is a product prepared by the soda method. According to the national industrial policy, only trona is currently allowed to increase production capacity, and no other soda ash preparation methods are allowed to expand or increase production capacity."
*ST Shuanghuan, which also produces ammonium chloride, also stated in the performance forecast that the sales of ammonium chloride in the first three quarters were significantly better than the same period of the previous year. .
The main operating data of Shaanxi Black Cat, which mainly covers synthetic ammonia, shows that the average unit price of synthetic ammonia in the third quarter was 3,19.38 yuan/ton, a year-on-year increase of 73.18% and a month-on-month increase of 10.68%.
Benefiting from the increase in product sales prices, Shaanxi Black Cat's revenue in the first three quarters increased by 142.55% year-on-year. The average unit price of its main raw material, clean coal, in the third quarter increased by 140.71% year-on-year and 59.34% month-on-month.
Sierte, located in Anhui Province, mainly produces phosphate compound fertilizer, monoammonium phosphate, phosphate rock, sulfuric acid, phosphoric acid and other intermediate products. The company's net profit attributable to the parent in the first three quarters of this year increased by 88.42% year-on-year. The company said that the increase in profit was a major reason It lies in the rise in the price of phosphate rock.
In this situation, fertilizer companies that operate in an integrated manner have gained a relative competitive advantage.
Yuntianhua, which has the advantage of the whole industrial chain of "mineralization and integration", expects that the net profit attributable to the parent company in the first three quarters will be about 2.772 billion yuan to 2.872 billion yuan, a year-on-year increase of 25.19 times to 26.13 times.
Yuntianhua said that the company's self-sufficiency rate of important raw materials such as phosphate rock, phosphoric acid, and synthetic ammonia has increased significantly during the year. At the same time, it has taken advantage of the centralized procurement platform to control the procurement rhythm of bulk raw materials such as sulfur and coal, effectively alleviating the impact of rising bulk raw material prices.
Xinyangfeng is a leading enterprise in the phosphate and compound fertilizer industry in China. The company’s board secretary Wan Wei stated in a recent survey summary that the prices of raw materials such as monoammonium phosphate, urea, and potash in the first three quarters of this year have risen to unprecedented levels in history.
As an integrated enterprise of the industrial chain, Xinyangfeng owns the raw materials of monoammonium phosphate, so it will also benefit from the increase in raw material prices.
The third quarterly report shows that from January to September this year, Xinyangfeng's revenue and non-net profit deduction both achieved positive growth, and the deduction of non-net profit reached 1.04 billion yuan.
Domestic fertilizer prices will stabilize
Problems such as increased planting costs are expected to be resolved
The price increase of raw materials will also have an impact on the middle and lower reaches of the fertilizer industry.
"This round of fertilizer boom market has two main supporting factors. In addition to being driven by the increase in the price of upstream raw materials, the downstream demand is also an important supporting factor." In an interview with the "Securities Daily" reporter, said that with the gradual recovery of the global economy, the demand for fertilizers in related industries has increased, but the global supply chain is not smooth due to various reasons, foreign fertilizer production capacity is limited, and domestic fertilizer exports At the same time, the prices of domestic vegetables and other agricultural products have risen, and farmers' enthusiasm for planting has increased, leading to a surge in domestic demand for chemical fertilizers.
Mo Rong also said: "The current increase in product sales prices can offset the cost impact caused by the increase in natural gas prices. However, if the supply is not sufficient, resulting in a reduction in the operating load of the relevant nitrogen fertilizer manufacturers, it will lead to a substantial increase in costs and further shortages in the market. , Which in turn pushes up product prices, and ultimately puts more pressure on agricultural costs."
Wen Shi mentioned that Mr. Li's planting company has nearly one million acres of arable land, mainly for grain and oil planting.
"The planting structure of our base has two crops per year, one is rice and the other is wheat. For us, the increase in the price of agricultural materials will definitely increase the planting cost, and the net cost per mu will increase by more than 100 yuan throughout the year." Li Li Mr. told reporters.
Speaking of the fluctuation of the fertilizer market price this year, Mr. Jiang, an agricultural material agent in Nantong, was particularly touched. “The price has risen too high this year. 50 kg of urea has been sold from 100 yuan/bag to 180 yuan/bag. Diammonium phosphate, the same below) has risen from 1.8 yuan/jin to 3.2 yuan/jin. There are fewer people buying it, and I can’t sell it when I buy it. I don’t do this (agent) anymore."
Right now is the wheat planting season, and many large grain farmers are busy in the fields.
Granny Zhang, a grain grower in Nantong, said in an interview with reporters, “This year the prices of fertilizers and pesticides are rising. You see, our family has more than ten acres of land, and the two crops mainly grow soybeans, corn and wheat. Corn grows. At that time, we were all bags of underground fertilizer, and we needed almost two bags of diammonium per mu of land, and 20 or 30 bags of fertilizer were used for one crop."
Grandma Zhang also told reporters that in previous years, her family still had pig manure as fertilizer, and some fertilizer was purchased appropriately. The rest of the fertilizer was basically self-sufficient, but this year, because there is no pig raising, the fertilizer can only be purchased from outside.
Planting crops has to be willing to put in fertilizer, otherwise it will not grow.
If the price goes up, you still have to buy.
In order to effectively resolve the impact of rising prices of agricultural materials on farmers' income from growing grain, the central government issued a one-time subsidy of 20 billion yuan to farmers who actually grow grain in July this year to make up for the increase in expenditure caused by the increase in the cost of agricultural materials this year.
"This year's grain output is okay overall, and the country's reserves are relatively sufficient. Grain is the most basic material to protect the national economy and people's livelihood. For consumer terminals, it is unlikely that there will be a substantial price increase. For the planting process, profits are affected. We Indeed received some subsidies." Mr. Li told reporters.
It is understood that, in order to ensure that the actual grain growers truly benefit, the Ministry of Finance requires all regions to further improve the distribution methods based on the current procedures and methods of granting subsidies, taking into account the actual conditions, making full use of modern information technology means, and using existing subsidy funds. Distribute basic data, food crop insurance underwriting data, identity information of farmers and new agricultural business entities, accurately identify actual grain farmers, and strengthen verification of subsidized areas.
In order to stabilize the fertilizer market and ensure stable supply, local governments are also taking actions.
The reporter learned that the relevant departments of Yancheng City, Jiangsu Province joined 11 local agricultural enterprises to form a service alliance, which reserves more than 70,000 tons of fertilizers and 1,000 tons of pesticides, and has also secured more than 300,000 tons of fertilizers and more than 2,000 tons of pesticides to meet Farming needs of local farmers.
“The fertilizer market is still in the off-season before and after the Spring Festival, but this year’s overall feeling is that the off-season is not low. Part of the domestic fertilizer is exported. The price of this fertilizer overseas has risen quite high, and to a certain extent, it also supplies the domestic market. This has brought some impact." Mr. Li told reporters: "Coal prices have been lowered, and fertilizer prices have also come down in these two days."
Meng Wei also stated on October 20 that in order to ensure the stable supply of domestic chemical fertilizers and reasonable prices, the National Development and Reform Commission organized a meeting on the working mechanism of ensuring the supply and price of chemical fertilizers in a timely manner, and jointly issued a notice to ensure the supply and price stability of chemical fertilizers. .
The National Development and Reform Commission intends to organize the first batch of potash fertilizer reserves through low-price auctions. The purpose of this auction is to achieve low-priced reserve resources to benefit farmers. At the same time, the reserve releases guides market expectations and leverages the release of social resources to meet this winter. The production of compound fertilizer in the next spring will ensure the fertilizer needs for spring farming next year.
In an interview with a reporter from the Securities Daily, a chemical analyst of a securities company said, “At present, the price difference between the price increase of fertilizer raw materials and the price increase of the finished product is relatively large. On the whole, fertilizer companies still have a lot of profit margins. With policy regulation, domestic fertilizer prices will tend to stabilize, and fertilizer companies will prefer the international market with greater export profit margins.” It is expected that subsequent national policies will further regulate fertilizer exports to maintain the balance of domestic fertilizer supply and demand.
It is unlikely that domestic fertilizer prices will continue to rise in the future, but they will basically maintain the current high levels of fertilizer prices with small fluctuations.
Speaking of solving problems such as the increase in planting industry costs, Fan Jing suggested, “Traditional growers can try to change the direction of development; new agricultural business entities are the development direction of future agricultural modernization, and they can use their own agricultural machinery to provide trusteeship and semi-trusteeship for neighboring farmers. Land. Large grain farmers use large amounts of agricultural materials and machinery. They can directly contact agricultural material manufacturers to help neighboring farmers order high-quality agricultural materials and earn part of the income from them, thereby accelerating the development of industrial integration." (Securities Daily)