[American Bull Fertilizers Group Reprinted] - The domestic fertilizer market is sluggish and exports of urea to the city will not work.

Since July, fertilizer market prices have been on a steady decline. Typically, during the peak usage period in July and August, urea prices should reach their annual high. However, due to the continuous increase in new production capacity, the implementation of government policies for light storage and supply, as well as strict export control measures, the domestic supply-demand balance has shifted significantly. As a result, prices did not rise during the peak season but instead dropped by an average of 200 to 300 yuan per ton. As autumn approached and the fertilizer season began, urea prices saw a slight increase, but they still fell sharply compared to the same period last year, dragging down other fertilizer prices as well. The market price for diammonium phosphate and compound fertilizers used for winter wheat planting remained low. Due to the downturn in the fertilizer market, manufacturers were forced to lower their ex-factory prices repeatedly. Many companies are now operating at a loss or barely breaking even. Faced with rising raw material costs and a weak domestic market, many companies have turned their attention to the international market, calling for a reduction in the provisional tax rate on urea exports. However, the author believes that the country is unlikely to make significant changes to its fertilizer export policy in the near future. First, maintaining the stability of the overall policy is crucial. Second, the temporary export tariff on urea has been one of the most effective macro-control measures over the past two years, playing a positive role in securing domestic supply. Third, exporting high-energy, high-material, and high-pollution fertilizers comes at the expense of domestic resources, energy, and the environment—something that does not justify the economic benefits. This is especially true given the current expansion of China’s trade surplus. In fact, according to the author’s understanding, relevant state departments have repeatedly emphasized that the seasonal temporary tariff policy on urea exports will not be adjusted. Another analysis shows that the current trend in the international fertilizer market is also unfavorable for Chinese urea exports. Demand and prices in traditional importing countries around China have all declined to varying degrees. For example, the FMB (Fertilizer Markets Guide) reported that the offer price for offshore Chinese bagged urea in October was between 220–225 USD per ton. After deducting 15% in tariffs and other expenses, how much profit can a company realistically make? It seems slim at best. It appears that relying on urea exports to boost the economy is not a feasible solution. To reverse the current downturn in the domestic fertilizer market, companies must look inward and identify the root causes. Wang Wenshan, vice chairman of the China Nitrogen Fertilizer Industry Association, pointed out that in response to recent market improvements, many companies have invested heavily in expanding production. This low-level, redundant construction has increased the nation's new urea production capacity by more than 40% of the total domestic supply. With this new capacity gradually coming online, urea companies will soon face the consequences of their own overexpansion.

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