Since the second half of last year, due to the occurrence of relatively large production accidents in two large domestic ammonia producers, domestic liquid ammonia prices have fluctuate frequently, and prices of urea and nitric acid have also fluctuate. Due to tight liquid ammonia resources, the urea and nitric acid industries also staged a tug-of-war battle for liquid ammonia.
The accident led to a tight supply of liquid ammonia. In the second half of 2007, with the explosion of the ammonia alcohol plant of Shandong Deqilong Chemical Industry Group Co., Ltd., there was a 750,000 tons/year large-scale ammonia plant in China, which was the largest in the country in Shandong Province. The output of the synthetic ammonia production base dropped to 7.43 million tons, a decrease of 198,000 tons from the previous year. Affected by this, the national output of synthetic ammonia was 51.5887 million tons, an increase of only 5.4% over the previous year, which was far below the growth rate of about 13% in previous years. Therefore, after entering the fourth quarter of 2007, the domestic liquid ammonia market has become increasingly tense, and prices have been increasing day by day.
At the end of 2007, as domestic coal and urea prices continued to rise, the domestic supply and demand of liquid ammonia contradictions became more pronounced and prices rose strongly. The mainstream ex-factory prices in all regions have reached 2,700-2,800 yuan (t price, the same below).
After the Spring Festival this year, with the gradual elimination of the effects of the snowstorm and the gradual recovery of power supply and transportation, the downstream urea and nitric acid enterprises of liquid ammonia have started to return to work or increased the production load to varying degrees, resulting in an increase in liquid ammonia market demand and tight resources. However, on February 13, Sinopec Nanjing Chemical Industry Group Co., Ltd. also produced an explosion of 300,000 tons of synthetic ammonia plant, which reduced the domestic liquid ammonia resources overnight. The already tight liquid ammonia resources became even more acute. The price rose rapidly and it was almost a price for a day. In just two weeks, the mainstream price of the domestic liquid ammonia market soared to 3,200 yuan.
In mid-March, with the restart of the ammonia plant of Nanjing Chemical Industry Co., the domestic liquid ammonia resource situation was eased. However, as the system just started to drive, the company's liquid ammonia production is not very large, so the current price of liquid ammonia in East China is still at a high of 3150 to 3200 yuan, and some other regions fell back to 3050 to 3100 yuan.
By the end of March, the price of liquid ammonia rose again. The mainstream price in the market has reached as high as 3,250 to 3,300 yuan, and local transportation difficulties in areas such as Zhejiang Province are as high as 3,800 yuan, which is astounding.
Liquid ammonia prices affect urea nitric acid The data show that about 60% to 70% of liquid ammonia in China is used to produce fertilizers, such as urea, ammonium bicarbonate, etc., about 30% to 40% for the production of nitric acid, ammonium nitrate and other chemical products.
As the basic raw material for urea production, ammonia is listed as the largest expenditure in urea production costs. In view of the fact that most of our synthetic ammonia is based on natural gas or coal, domestic ammonia synthesis urea enterprises generally enjoy the price of the national preferential gas, while the raw coal of coal-to-ammonia enterprises is relatively market-oriented, so changes in coal costs can basically reflect the Ammonia market supply and demand changes. Under the same conditions of demand, the rise in coal prices will surely push up the price of synthetic ammonia, and the increase in the price of synthetic ammonia will certainly drive up the price of urea.
Nitric acid production is different from urea. At present, domestic nitric acid plant is not only used to produce nitric acid from synthetic natural ammonia produced by natural gas, but also used as raw material to produce synthetic ammonia and then processed into nitric acid. Therefore, coal price is a barometer of the price of nitric acid. The difference is that because the proportion of ammonia used in nitric acid production is lower than that of urea, the price of coal for the market price of nitric acid is usually 5 to 6 months slower than that of urea.
For a long time, due to the different production processes, the nature of enterprises and the management modes of the various nitric acid enterprises in China, the calculation method for the cost of nitric acid is also different, and the production costs of the various companies vary widely. According to Sun Lihui, general manager of Shandong Huayang Deere Chemical Co., Ltd., since the plant is a typical “two-out†type nitric acid enterprise, its cost calculation is relatively easy. According to data provided by Sun Lihui, at present, the cost of nitric acid production in China, the high-pressure ammonia consumption of 305 kg / ton, the entire pressure method ammonia consumption 292 kg / ton, atmospheric pressure ammonia consumption 310 kg / ton, dual pressure ammonia consumption 283 Kg/ton. The double-pressurized production process has the lowest cost, and the high-pressure and atmospheric-pressure processes have the highest production costs. With the current liquid ammonia price calculation cost, only the products produced by the dual pressure process nitric acid plant can still maintain the cost, and the products produced by the other process nitric acid plants are under the production cost line.
Urea nitric acid unfolds pulls the ammonia to pull the war to see to say, the country many times limits and reminds to the chemical fertilizer price and so on urea, undoubtedly will suppress the urea to the synthetic ammonia demand. However, due to the fact that urea companies in various regions enjoy various preferential policies or compensations from the state or local governments in different degrees, especially after the disaster, many enterprises that have stopped production or reduced production are urgently required to start production at full capacity in order to make up for disaster weather for the annual production plan. The impact, coupled with the arrival of the current farming season, no company will abandon this fleeting season of agricultural fertilizer and sales of gold, urea production enthusiasm, resulting in increasing demand for liquid ammonia.
On the other hand, due to rising prices of the second largest cost of nitric acid and the third largest cost of steam, even if liquid ammonia prices remain at the current level of RMB 3050 to RMB 3100, few companies can make money. At present, the proportion of domestic production of nitric acid plants that stop production or reduce production is still very large, and the price pressure is still high. Under the background of increasingly tense coal resources, the shortage of liquid ammonia will inevitably cause urea equipment and nitric acid equipment to pull liquid ammonia.
Within the company, as some urea production enterprises have nitric acid plants at the same time, when synthetic ammonia is insufficient, the production of urea or production of nitric acid becomes the first problem for decision makers to solve. At this point, gross profit margin becomes the most important decision-making parameter of an enterprise. From the perspective of the pursuit of profit maximization by the enterprise, who can make money is, of course, the fundamental basis for enterprise decision-making.
Considering from the external market, due to the accidents of the two major ammonia plants in China since last year, which caused a serious shortage of resources in the domestic market, the profits of the urea and nitric acid markets are bound to become the main factors determining the flow of limited liquid ammonia resources.
The accident led to a tight supply of liquid ammonia. In the second half of 2007, with the explosion of the ammonia alcohol plant of Shandong Deqilong Chemical Industry Group Co., Ltd., there was a 750,000 tons/year large-scale ammonia plant in China, which was the largest in the country in Shandong Province. The output of the synthetic ammonia production base dropped to 7.43 million tons, a decrease of 198,000 tons from the previous year. Affected by this, the national output of synthetic ammonia was 51.5887 million tons, an increase of only 5.4% over the previous year, which was far below the growth rate of about 13% in previous years. Therefore, after entering the fourth quarter of 2007, the domestic liquid ammonia market has become increasingly tense, and prices have been increasing day by day.
At the end of 2007, as domestic coal and urea prices continued to rise, the domestic supply and demand of liquid ammonia contradictions became more pronounced and prices rose strongly. The mainstream ex-factory prices in all regions have reached 2,700-2,800 yuan (t price, the same below).
After the Spring Festival this year, with the gradual elimination of the effects of the snowstorm and the gradual recovery of power supply and transportation, the downstream urea and nitric acid enterprises of liquid ammonia have started to return to work or increased the production load to varying degrees, resulting in an increase in liquid ammonia market demand and tight resources. However, on February 13, Sinopec Nanjing Chemical Industry Group Co., Ltd. also produced an explosion of 300,000 tons of synthetic ammonia plant, which reduced the domestic liquid ammonia resources overnight. The already tight liquid ammonia resources became even more acute. The price rose rapidly and it was almost a price for a day. In just two weeks, the mainstream price of the domestic liquid ammonia market soared to 3,200 yuan.
In mid-March, with the restart of the ammonia plant of Nanjing Chemical Industry Co., the domestic liquid ammonia resource situation was eased. However, as the system just started to drive, the company's liquid ammonia production is not very large, so the current price of liquid ammonia in East China is still at a high of 3150 to 3200 yuan, and some other regions fell back to 3050 to 3100 yuan.
By the end of March, the price of liquid ammonia rose again. The mainstream price in the market has reached as high as 3,250 to 3,300 yuan, and local transportation difficulties in areas such as Zhejiang Province are as high as 3,800 yuan, which is astounding.
Liquid ammonia prices affect urea nitric acid The data show that about 60% to 70% of liquid ammonia in China is used to produce fertilizers, such as urea, ammonium bicarbonate, etc., about 30% to 40% for the production of nitric acid, ammonium nitrate and other chemical products.
As the basic raw material for urea production, ammonia is listed as the largest expenditure in urea production costs. In view of the fact that most of our synthetic ammonia is based on natural gas or coal, domestic ammonia synthesis urea enterprises generally enjoy the price of the national preferential gas, while the raw coal of coal-to-ammonia enterprises is relatively market-oriented, so changes in coal costs can basically reflect the Ammonia market supply and demand changes. Under the same conditions of demand, the rise in coal prices will surely push up the price of synthetic ammonia, and the increase in the price of synthetic ammonia will certainly drive up the price of urea.
Nitric acid production is different from urea. At present, domestic nitric acid plant is not only used to produce nitric acid from synthetic natural ammonia produced by natural gas, but also used as raw material to produce synthetic ammonia and then processed into nitric acid. Therefore, coal price is a barometer of the price of nitric acid. The difference is that because the proportion of ammonia used in nitric acid production is lower than that of urea, the price of coal for the market price of nitric acid is usually 5 to 6 months slower than that of urea.
For a long time, due to the different production processes, the nature of enterprises and the management modes of the various nitric acid enterprises in China, the calculation method for the cost of nitric acid is also different, and the production costs of the various companies vary widely. According to Sun Lihui, general manager of Shandong Huayang Deere Chemical Co., Ltd., since the plant is a typical “two-out†type nitric acid enterprise, its cost calculation is relatively easy. According to data provided by Sun Lihui, at present, the cost of nitric acid production in China, the high-pressure ammonia consumption of 305 kg / ton, the entire pressure method ammonia consumption 292 kg / ton, atmospheric pressure ammonia consumption 310 kg / ton, dual pressure ammonia consumption 283 Kg/ton. The double-pressurized production process has the lowest cost, and the high-pressure and atmospheric-pressure processes have the highest production costs. With the current liquid ammonia price calculation cost, only the products produced by the dual pressure process nitric acid plant can still maintain the cost, and the products produced by the other process nitric acid plants are under the production cost line.
Urea nitric acid unfolds pulls the ammonia to pull the war to see to say, the country many times limits and reminds to the chemical fertilizer price and so on urea, undoubtedly will suppress the urea to the synthetic ammonia demand. However, due to the fact that urea companies in various regions enjoy various preferential policies or compensations from the state or local governments in different degrees, especially after the disaster, many enterprises that have stopped production or reduced production are urgently required to start production at full capacity in order to make up for disaster weather for the annual production plan. The impact, coupled with the arrival of the current farming season, no company will abandon this fleeting season of agricultural fertilizer and sales of gold, urea production enthusiasm, resulting in increasing demand for liquid ammonia.
On the other hand, due to rising prices of the second largest cost of nitric acid and the third largest cost of steam, even if liquid ammonia prices remain at the current level of RMB 3050 to RMB 3100, few companies can make money. At present, the proportion of domestic production of nitric acid plants that stop production or reduce production is still very large, and the price pressure is still high. Under the background of increasingly tense coal resources, the shortage of liquid ammonia will inevitably cause urea equipment and nitric acid equipment to pull liquid ammonia.
Within the company, as some urea production enterprises have nitric acid plants at the same time, when synthetic ammonia is insufficient, the production of urea or production of nitric acid becomes the first problem for decision makers to solve. At this point, gross profit margin becomes the most important decision-making parameter of an enterprise. From the perspective of the pursuit of profit maximization by the enterprise, who can make money is, of course, the fundamental basis for enterprise decision-making.
Considering from the external market, due to the accidents of the two major ammonia plants in China since last year, which caused a serious shortage of resources in the domestic market, the profits of the urea and nitric acid markets are bound to become the main factors determining the flow of limited liquid ammonia resources.