With the arrival of the peak season of demand, the price of chemical fertilizers has rebounded significantly
2023/8/18
The reporter called Xinyangfeng, a compound fertilizer manufacturer, as an investor. The relevant person in charge of the company said: "Currently, the company's compound fertilizer production and operation are normal. With the arrival of the peak season of demand, the company has basically achieved full production."
"The main factor driving the recent stabilization and recovery of chemical fertilizer prices is the improvement in the relationship between supply and demand. It is expected that chemical fertilizer prices will continue to fluctuate and rise in the future." Jie Chong, deputy dean of the East High-Tech Investment Research Institute, told reporters.
Chen Yi, an analyst in the basic chemical industry of China National Finance Securities, said that in the short and medium term, after nearly a year of adjustments in the fertilizer industry, most of the price risks have been released, and the downward pressure is relatively small; As well as the elimination of outdated production capacity, the improvement of the supply and demand pattern in the fertilizer market will drive the improvement of industry profitability.
Affected by the continuous drop in fertilizer prices in the first half of the year, the overall operating conditions of the A-share fertilizer track were not satisfactory. According to data from Oriental Fortune Choice, as of August 17, five listed companies on the fertilizer track have released their 2023 interim performance reports, and their net profits during the reporting period have all decreased year-on-year. In addition, only 1 of the 18 listed companies that have issued a semi-annual performance forecast has a prelude. A number of companies stated in the announcement that due to factors such as weak release of terminal downstream demand during the reporting period, it had an impact on the company's profitability.
Yang Ruyi, general manager of Kuwang Investment, said that there are three main reasons for the poor overall operation of the fertilizer industry in the first half of the year: first, the demand is weak; second, the price of raw materials has fallen back, and the pricing space of enterprises has been compressed. The price drop of superimposed products is significantly greater than that of raw materials. The third is the market structural problems of the chemical fertilizer industry itself. The overall market shows a trend of falling volume and price, indicating that the structural blockage of the market still exists and the price pressure is relatively high.
The reporter learned from interviews that many chemical fertilizer companies are relatively optimistic about their profitability in the second half of the year. The above-mentioned relevant person in charge of Xinyangfeng said that the company is more optimistic about the market in the second half of the year. The main reason is that in the first half of the year, it was affected by price fluctuations. The inventory of downstream dealers is not much. Factors such as the current peak demand season have brought positive expectations, and dealers replenished goods. The obvious release of demand is expected to have a positive impact on the company's operations in the second half of the year.
Jie Chong said that as the third quarter enters the peak season of demand, the demand for fertilizers at home and abroad will greatly increase. Under the current low inventory level, the recovery of fertilizer market demand will drive fertilizer companies to increase their operating rates, and fertilizer products are expected to achieve both volume and price increases. Quickly repair the profitability of chemical fertilizer companies.
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