Frbiz Reports Fertilizer Market Downturn in the First Half Year

Jun 25, 2010, 10:00 ET from

BEIJING, June 25 /PRNewswire-Asia/ --, one of China's leading B2B search platforms, reports a fertilizer market downturn in the first half year.

In the first half of this year, by a relative surplus of production capacity, low-temperature weather, delayed spring fertilizer time, drought in southwest China, northeast market saturation and other factors, the overall performance of China's fertilizer industry is light.

Frbiz observes that after the Spring Festival, urea supply was abundant; with the price slightly higher, the main wholesale price was 1,750-1,890 RMB/ton, which rose 0.7% over February, and the retail price was 1,800-1,900 RMB/ton, 1.6% higher than February. The March urea market was mainly affected by rain and snow; as winter wheat topdressing was postponed, the price declined. Mainstream wholesale cost was 1,760-1,860 RMB/ton, chain decreased 0.5%; as the retail price was 1,800-1,890 RMB/ton, the chain fell 2.1%.

    Frbiz analyzes prices fell mainly because of the following factors:
    1. The international urea prices have risen. In early March, the FOB price
       was 325-473 USD/ton; the chain rose 3.2%, and the high tariffs made
       Chinese urea producers unable to export, so the Chinese production
       capacity could not be consumed in the international market.
    2. The urea fertilizer market downturn has significantly reduced the
       amount of urea.
    3. Low temperature caused delivery delay, so under huge pressure from
       plant and large distributors, they cut prices on shipping.

Since the beginning of summer, the urea market supply is abundant, and the market is light, though prices fell slightly. Frbiz analyzes that maize top dressing will start by the end of June or early July, and though now the price low, distributors are still more cautious. Also, the compound fertilizer market slump made the amount of urea fertilizer drop sharply, affecting the urea prices as well. Frbiz forecasts that with maize top dressing started, the market will be good, but prices will not fluctuate too much.

Compound Fertilizer: Shandong has many compound fertilizers ( ) plants and supply is abundant, but the market performance is light. After the Spring Festival, the main wholesale price was 2,200-2,480 RMB/ton; the retail price was 2,300-2,600 RMB/ton, year-on-year down 300 RMB. Frbiz analyzes the reasons: First, because the cold weather, the spring fertilizer market did not start on time. Second, urea is the main raw material for fertilizer, and the urea fertilizer price drop surely brought down the compound price. Third, due to the lower prices of urea, dealers had cut price expectations on compound fertilizer.

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