Fertilizer Industry Economic Analysis in the First Half of the Year

In the first half of this year, in response to the unfavorable supply of raw materials for fertilizer production and the high prices, the fertilizer industry was meticulously organized and carefully deployed, striving to achieve stable production and high yields, completing the task of spring plowing and fertilizers, and the industry as a whole showed sustained and stable development.

I. Steady increase in product output In the first six months of the year, a total of 30.624 million tons of chemical fertilizers were produced in the country, which was 8.3% higher than the same period of last year. The production of nitrogen fertilizer was 21.536 million tons, a year-on-year increase of 2.3%; the production of phosphorus fertilizer was 7.173 million tons, an increase of 29.8%; the production of potash fertilizer was 1.914 million tons, an increase of 17.4% over the same period of last year. In general, the fertilizer industry completed the task of ensuring the use of spring plowing in the first half of the year.

Second, economic returns picked up quickly In the first five months, the fertilizer industry realized a total profit of RMB 14.9 billion, an increase of 76.8% year-on-year. The nitrogen fertilizer industry realized a profit of 4.02 billion yuan, an increase of 119.1% year-on-year; the phosphate fertilizer industry realized a profit of 1.51 billion yuan, an increase of 117.1% year-on-year; the potash fertilizer industry realized a profit of 3.07 billion yuan, a year-on-year increase of 45.1%. However, the profit margin of the fertilizer industry's sales revenue is still low, and nearly one-third of the nitrogen fertilizer companies are in a loss situation.

III. Optimizing capital investment From January to June, the fertilizer industry completed a total investment of 47.86 billion yuan, a year-on-year increase of 21.9%, which was lower than the growth rate of fixed assets investment of the whole society by 3.7 percentage points; 1161 construction projects, a year-on-year decrease of 13.4%; new projects started 654, a year-on-year decrease of 17.1%. Among them, investment in the phosphate fertilizer industry with serious overcapacity fell by 11.2% year-on-year, construction projects fell by 20.6% year-on-year, and newly started projects decreased by 32.9% year-on-year. In the case of the nitrogen fertilizer industry, where construction projects dropped by 30.6% year-on-year, investment increased by 20.2%, and the industry is moving toward advanced technologies and large-scale installations.

On the whole, the production and operation situation of the fertilizer industry continued to improve in the first half of the year, and the task of guaranteeing supplies was completed. In the period of spring farming, the price of domestic fertilizers was lower than the international market by more than 300 yuan, which reduced the cost of fertilizers used by farmers. However, there are still problems such as excess production capacity of phosphate fertilizers, small scale of nitrogen fertilizers, low technological level, and insufficient production capacity of low-cost products. Relevant departments and enterprises should further intensify their work, actively promote the adjustment of raw materials and power structure of the nitrogen fertilizer industry, strictly control the production capacity of new phosphate fertilizers, accelerate the elimination of backward production capacity, and increase the ability to provide low-cost fertilizer supply.