Since the beginning of this year, the price of urea has continued to fall sharply on the basis of last year's decline. At the same time, corporate production costs continue to rise. According to industry sources, if the price of urea falls below the current minimum factory price of 1,400 yuan/ton, there will be a loss in the entire industry. By the second half of the season, the contradiction will become even more prominent. If we do not take measures to limit production, this year's supply exceeds demand will be more than 8 million tons. It is understood that in 2006, 90% of the nitrogen fertilizer industry profits are from urea.
China National Nitrogen Association proposed the proposal of limiting production insured prices and won the approval of most companies. It is reported that this can be achieved by enterprises themselves. For example, more production of liquid ammonia, less urea production; a set of two or more devices to stop production; equipment maintenance in the second half. It is said that the limited production will increase the cost of the enterprise, but its loss is still lower than the loss caused by the open-ended production, which is beneficial to both the industry and the enterprise. But this must be recognized and actively participated by most companies in the industry.
After careful analysis of the national urea market situation, participants reached a consensus that the access and withdrawal mechanisms for urea production should be established in due course. In addition, the China Nitrogen Association also proposed to the relevant state departments to start early urea storage, adjust the urea tariff and other proposals.
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