In the first half of 2007, continuation of the trend at the end of 2006, the international market fertilizer prices have risen to varying degrees: on the 15th of June the US Gulf DOP FOB price was 435 US dollars / ton, an increase of 69.92% compared to the initial increase in the current round; Vancouver The spot price of potassium chloride was 175-205 U.S. dollars per ton, an increase of 10.14% from the beginning of the year; China's urea export price (FOB) was 292 U.S. dollars per ton, which was 32.27% higher than the initial rise of the current round. According to the forecast of the International Fertilizer Industry Association, the growth rate of fertilizer demand in 2007 and 2008 will reach 4.5% and 3% respectively.
The rapid development of bio-energy promotes the increase of fertilizer demand for fertilizer prices. The main reasons are: a substantial increase in energy prices has driven the rapid development of global biofuels; the rapid development of biofuels has driven the continuous growth of food demand; food needs The continuous growth has led to a significant increase in the prices of international food (especially corn). The dramatic increase in international food has finally led to an increase in the demand for fertilizers.
With the world's energy prices soaring, global biofuels have experienced rapid development since 2002. In 2006, the world ethanol production reached 13.5 billion gallons, which is about three times the 2001 output. In 2006, the number of ethanol production plants in the United States was 113, with a production capacity of 5.6 billion gallons. In 2008, 75 new plants will be added, and 9 of the existing plants will be expanded. Capacity will reach 11.7 billion gallons. About 14% of the corn in the United States was used for ethanol production in 2006. It is expected that this proportion will increase to 27% in 2008 and 33% in 2010.
The increase in grain prices translates into an increase in fertilizer demand. The World Bank report believes that the current world grain inventories are at a relatively low level, and it is expected that inventories will fall to 15.8% of total use in mid-2007, far below the average since 1990 (27%), especially for corn. Inventory is in a particularly low state. The United States will increase its corn planting area by 15% in 2007, but this growth will reduce the cultivation of other crops, and will inevitably cause the price of other crops to rise. This will lead to increased enthusiasm for farmers to grow grain and increase the demand for fertilizers.
The market outlook for nitrogen, phosphorus and potash is still promising. The potash utilization rate will continue to remain at a relatively high level. In recent years, global potash fertilizer production growth has been slow and demand has increased rapidly: In 2007, the global demand for potash fertilizer is expected to reach 31.83 million tons, which represents a year-on-year increase of 4.7%; and global potash fertilizer supply capacity growth in 2007 is expected to be only around 2.1%. Therefore, the global potash plant utilization rate will increase significantly from about 79% in 2006 to about 84% in 2007. According to the prediction of FERTECON company in the UK, the potash utilization rate in the world in 2008 and 2009 will have been maintained at about 84%. As the external dependence of potash fertilizer in China exceeds 60%, domestic potash fertilizer prices will be subject to fluctuations in international prices.
The domestic phosphate fertilizer market ushered in the peak season of consumer prices. In 2006, China produced 12.264 million tons of phosphate fertilizer, which accounted for about 28% of the global total output of phosphate fertilizer. It is the largest producer of phosphate fertilizer. From January to April of 2007, the import volume of DAP in China was 540,000 tons, a year-on-year decrease of 30.85%; the export volume was 307,400 tons, an increase of 71.45% year-on-year. The background of changes in China's import and export of diammonium phosphate, on the one hand, is the rapid development of domestic diammonium phosphate, and the other is the significant increase in international phosphate fertilizer prices since the beginning of the year. By the end of the third quarter of this year, China will enter the peak season for the consumption of phosphate fertilizer. According to the current international market prices of phosphate fertilizers and import and export status, it is expected that domestic phosphate fertilizer prices will further increase moderately before the peak season.
Nitrogen fertilizer production capacity grew steadily, but it still lags behind demand growth. From 2000 to 2006, the world's synthetic ammonia production capacity increased by 12.9 million tons, while demand increased by 18 million tons during the same period. According to Mosaic statistics, in 2007 the global urea production capacity will reach 1.522 million tons, with a growth rate of 3.26%, which is lower than the growth rate of demand. In 2006, the output of urea in China reached 45.786 million tons, a year-on-year increase of about 10%. From January to May of 2007, China's urea output was 10.2881 million tons, an increase of 17.26% year-on-year. Although international urea prices are high, due to China's restrictions on urea exports, the rapid increase in urea production will increase the pressure on the domestic urea market.
Investment Strategy for the Fertilizer Industry in the Second Half of the Year The strong demand in the international market has prolonged the domestic chemical fertilizer industry. It is expected that the potash fertilizer will continue to maintain a high degree of growth from the second half of 2007 to 2009; the growth of the phosphate fertilizer industry will gradually increase; the nitrogen fertilizer industry will maintain a high level of prosperity, but there will be some pressure in the future. The boom degree from high to low is: Potassium fertilizer, phosphate fertilizer, and nitrogen fertilizer. This is also the order we should choose to invest in the fertilizer industry.
Listed companies in the fertilizer sector can focus on salt lake potash, six-nation chemical, Hualu Hengsheng, and Liuhua shares. It is expected that the net profits of Salt Lake Potash from 2007 to 2009 will be 1.029 billion yuan, 1.294 billion yuan and 1.553 billion yuan, respectively, an increase of 26.7%, 25.8%, and 20.0% year-on-year, respectively; it is expected that the net profit of Six-State Chemicals from 2007 to 2009 will be 1.24 respectively. Billion yuan, 166 million yuan and 2.02 billion yuan, an increase of 110.5%, 33.3%, and 22.5% year-on-year respectively; Huaru Hengsheng's 2007-2009 net profit is expected to be 289 million yuan, 390 million yuan, and 442 million yuan respectively. The year-on-year increase was 23.7%, 34.8% and 13.3%. It is estimated that the net profits of Liuhua from 2007 to 2009 were 182 million yuan, 269 million yuan and 337 million yuan, respectively, an increase of 51.2%, 48.0% and 25.1% year-on-year respectively.
The rapid development of bio-energy promotes the increase of fertilizer demand for fertilizer prices. The main reasons are: a substantial increase in energy prices has driven the rapid development of global biofuels; the rapid development of biofuels has driven the continuous growth of food demand; food needs The continuous growth has led to a significant increase in the prices of international food (especially corn). The dramatic increase in international food has finally led to an increase in the demand for fertilizers.
With the world's energy prices soaring, global biofuels have experienced rapid development since 2002. In 2006, the world ethanol production reached 13.5 billion gallons, which is about three times the 2001 output. In 2006, the number of ethanol production plants in the United States was 113, with a production capacity of 5.6 billion gallons. In 2008, 75 new plants will be added, and 9 of the existing plants will be expanded. Capacity will reach 11.7 billion gallons. About 14% of the corn in the United States was used for ethanol production in 2006. It is expected that this proportion will increase to 27% in 2008 and 33% in 2010.
The increase in grain prices translates into an increase in fertilizer demand. The World Bank report believes that the current world grain inventories are at a relatively low level, and it is expected that inventories will fall to 15.8% of total use in mid-2007, far below the average since 1990 (27%), especially for corn. Inventory is in a particularly low state. The United States will increase its corn planting area by 15% in 2007, but this growth will reduce the cultivation of other crops, and will inevitably cause the price of other crops to rise. This will lead to increased enthusiasm for farmers to grow grain and increase the demand for fertilizers.
The market outlook for nitrogen, phosphorus and potash is still promising. The potash utilization rate will continue to remain at a relatively high level. In recent years, global potash fertilizer production growth has been slow and demand has increased rapidly: In 2007, the global demand for potash fertilizer is expected to reach 31.83 million tons, which represents a year-on-year increase of 4.7%; and global potash fertilizer supply capacity growth in 2007 is expected to be only around 2.1%. Therefore, the global potash plant utilization rate will increase significantly from about 79% in 2006 to about 84% in 2007. According to the prediction of FERTECON company in the UK, the potash utilization rate in the world in 2008 and 2009 will have been maintained at about 84%. As the external dependence of potash fertilizer in China exceeds 60%, domestic potash fertilizer prices will be subject to fluctuations in international prices.
The domestic phosphate fertilizer market ushered in the peak season of consumer prices. In 2006, China produced 12.264 million tons of phosphate fertilizer, which accounted for about 28% of the global total output of phosphate fertilizer. It is the largest producer of phosphate fertilizer. From January to April of 2007, the import volume of DAP in China was 540,000 tons, a year-on-year decrease of 30.85%; the export volume was 307,400 tons, an increase of 71.45% year-on-year. The background of changes in China's import and export of diammonium phosphate, on the one hand, is the rapid development of domestic diammonium phosphate, and the other is the significant increase in international phosphate fertilizer prices since the beginning of the year. By the end of the third quarter of this year, China will enter the peak season for the consumption of phosphate fertilizer. According to the current international market prices of phosphate fertilizers and import and export status, it is expected that domestic phosphate fertilizer prices will further increase moderately before the peak season.
Nitrogen fertilizer production capacity grew steadily, but it still lags behind demand growth. From 2000 to 2006, the world's synthetic ammonia production capacity increased by 12.9 million tons, while demand increased by 18 million tons during the same period. According to Mosaic statistics, in 2007 the global urea production capacity will reach 1.522 million tons, with a growth rate of 3.26%, which is lower than the growth rate of demand. In 2006, the output of urea in China reached 45.786 million tons, a year-on-year increase of about 10%. From January to May of 2007, China's urea output was 10.2881 million tons, an increase of 17.26% year-on-year. Although international urea prices are high, due to China's restrictions on urea exports, the rapid increase in urea production will increase the pressure on the domestic urea market.
Investment Strategy for the Fertilizer Industry in the Second Half of the Year The strong demand in the international market has prolonged the domestic chemical fertilizer industry. It is expected that the potash fertilizer will continue to maintain a high degree of growth from the second half of 2007 to 2009; the growth of the phosphate fertilizer industry will gradually increase; the nitrogen fertilizer industry will maintain a high level of prosperity, but there will be some pressure in the future. The boom degree from high to low is: Potassium fertilizer, phosphate fertilizer, and nitrogen fertilizer. This is also the order we should choose to invest in the fertilizer industry.
Listed companies in the fertilizer sector can focus on salt lake potash, six-nation chemical, Hualu Hengsheng, and Liuhua shares. It is expected that the net profits of Salt Lake Potash from 2007 to 2009 will be 1.029 billion yuan, 1.294 billion yuan and 1.553 billion yuan, respectively, an increase of 26.7%, 25.8%, and 20.0% year-on-year, respectively; it is expected that the net profit of Six-State Chemicals from 2007 to 2009 will be 1.24 respectively. Billion yuan, 166 million yuan and 2.02 billion yuan, an increase of 110.5%, 33.3%, and 22.5% year-on-year respectively; Huaru Hengsheng's 2007-2009 net profit is expected to be 289 million yuan, 390 million yuan, and 442 million yuan respectively. The year-on-year increase was 23.7%, 34.8% and 13.3%. It is estimated that the net profits of Liuhua from 2007 to 2009 were 182 million yuan, 269 million yuan and 337 million yuan, respectively, an increase of 51.2%, 48.0% and 25.1% year-on-year respectively.
Fischer-Tropsch wax can be used in plastic processing, such as injection molding, extrusion and pelletizing industries. In the production process of masterbatch and modified plastics, Fischer-Tropsch wax contributes to the dispersion of fillers and excellent smoothness during mixing. It can be used as an external lubricant for PVC. The low viscosity can increase the production speed of the product. It helps to disperse the pigments and fillers during mixing. It is especially useful in the extrusion of high-viscosity systems. It is more than ordinary PE WAX. 40-50% less, and can significantly improve the surface gloss of the product. When using intense colors, the melted Fischer-Tropsch wax can effectively wet the dye and reduce the extrusion viscosity.
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