"The rules for the adjustment and revitalization of the petrochemical industry clearly state that China will implement a national reserve system for chemical fertilizers." An expert who participated in the drafting and has received detailed instructions on the adjustment and revitalization of the petrochemical industry disclosed to the CBN reporter yesterday.
This means that China's chemical fertilizer "State Reserve" system has been established. He told CBN reporters that the rules did not disclose the total amount of fertilizers in the State Reserve.
Establishment of State Reserve of Chemical Fertilizer Reserves
The source said that the plan may be announced in the near future. According to sources, the time for the release of the rules may be this week.
As the key reserve system of the petrochemical industry following the oil reserve, the "Fertilizer State Reserve" system has been receiving attention.
According to Xu Bin, a research fellow at Changjiang Securities, the main reason for strengthening the national fertilizer reserves is undoubtedly a balance between supply and demand. "Although China's 2009 nitrogen and phosphate fertilizer production capacity are surplus (each 10 million tons and 7 million tons), this does not mean that the market supply is sufficient."
Stoppage production of fertilizer companies occurred at the end of last year and early this year. Xu Bin explained that this is related to insufficient supply of natural gas and low prices in the fertilizer market. Therefore, the market supply will not be enough. If stable national reserves are used, these situations will be greatly alleviated.
What is being implemented in China is the commercial reserve system of chemical fertilizers. Last year, China had 8 million tons of fertilizer reserves, compared with 16 million tons this year.
Compared with commercial reserves, the State Reserve will have a greater effect on stabilizing market prices.
A person at the China Phosphate Fertilizer Industry Association felt that it was difficult to thoroughly implement commercial reserves. “Because commercial reserves are all acts of the enterprise itself, all are based on profits. At this stage, although sales of phosphate fertilizers are up, profits are very high. Poor, the enthusiasm of corporate reserves is not high, and if the price continues to decline, there will be great business risks."
In the first two months of this year, China’s fertilizer revenue was 5.55 billion yuan, an increase of 2.9%; operating profit was only 490 million yuan, a year-on-year drop of 86%; the operating profit of the phosphate fertilizer industry fell by 145.6% year-on-year.
"After the national reserves are established, it is the state's behavior." Xu Bin said that the market price of chemical fertilizers fluctuates greatly. Once the price rises and the national reserves are dispatched, the market price will be able to be stabilized and the farmers will benefit.
The number of reserves is not determined
The amount of national fertilizer reserves previously discussed in the industry was not included in the detailed rules. The newspaper had reported exclusively that the core content of the discussion at that time was that the amount of chemical fertilizer reserves in the central government would be 5 million tons this year, and that in 2010 will total 10 million tons.
Xu Bin said that the quantity may have disappeared because the government did not think it necessary to announce it. This is just like the country’s grain reserves and it is not too open to the public.
However, the idea of ​​Liangbin, a research fellow at CITIC Jianying, is not the same: “The time is not yet for the quantity to be released. The reserve number will still be said by the outside world. The national reserve basically means the off-season reserve. The off-season reserve is generally from the year of October to the second year. During the month of March, the open time of the annual figures for fertilizers and business reserves is also in the second half of the year.†The National Development and Reform Commission has announced that 16 million tons of commercial reserves account for a quarter of China's spring plowing and fertilizer.
Liang Bin predicted that the national reserve may be mainly ammonium phosphate and urea products. Last year, China’s urea production was about 56 million tons. The total demand for DAP and urea this year is approximately 60 million tons.
The CBN reporter also learned that the rules also mentioned that other petrochemical reserves will be established, such as active oil product reserves, but rubber (information, market) reserves are not included in the plan.
For refined oil reserves, the content of the detailed rules is the same as the previous draft. The expert once told reporters that it is recommended to reserve 3 million tons in 2009, 6 million tons in 2010, and 10 million tons in 2011.
Moreover, such as vigorously supporting the overseas mergers and acquisitions of oil companies, and focusing on domestic oil refining and chemical projects are reflected in the details. The aforementioned experts who disclosed the details also stated that in the future, the government may also publish a project catalogue to encourage more local companies to promote important petrochemical projects.
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