In 2022, China's phosphate compound fertilizer market has walked out of the trajectory of first rising, then suppressing, and then rising. Although the total output of the whole year declined, it still completely guaranteed the domestic supply of phosphate compound fertilizer, and the price remained relatively low, and the industry maintained capital preservation operation throughout the year. For the operation of the phosphate compound fertilizer industry in 2023, Li Guang, secretary general of the China Phosphate Compound Fertilizer Industry Association, said that price stability and supply assurance will still be the industry's top priority in 2023. From the perspective of market operation, the price of phosphate compound fertilizer will not fluctuate significantly in 2023, and the total consumption will be relatively stable.

Last year, prices were stabilized and supply was guaranteed

2022 is a difficult year for China's phosphate compound fertilizer industry. In this year, the export of phosphorus compound fertilizer industry decreased, the operating rate declined, and the cost was high. However, it is in such a difficult situation that the phosphate compound fertilizer industry has still completed the task of stabilizing prices and ensuring supply.

"The decline in total phosphate compound fertilizer production in 2022 is a foregone conclusion." Li Guang introduced that due to the fluctuation of the phosphate compound fertilizer market, most enterprise installations adopt negative operation, especially in the third quarter of 2022, the overall operating rate of the phosphate fertilizer industry is even less than 50%, which is nearly 20 percentage points lower than the peak at the beginning of the year, and the cumulative output of phosphate fertilizer in China in the first 11 months reached 14.84 million tons, down 12% year-on-year.

However, the decline in production has not led to problems in the supply of phosphorus compound fertilizer in China. In this regard, Li Guang explained that the decline in phosphate compound fertilizer production is mainly due to the decrease in exports. Due to the large decline in phosphate compound fertilizer exports in 2022, the cumulative output is lower than in previous years, according to the calculation of capacity release, China's phosphate compound fertilizer production capacity can fully guarantee the domestic fertilizer supply, and at the same time has absolute support for exports.

Li Guang analyzed that although the phosphate compound fertilizer market is good in 2022, the reason why the industry has not obtained huge profits is that the high price of raw materials in the first half of the year drove the price of phosphorus compound fertilizer up, but the profit margin has not expanded. In the third quarter of 2022, phosphorus compound fertilizer enterprises are still digesting high-priced raw materials in the early stage. Entering the fourth quarter of 2022, with the arrival of the winter storage season, although the price of phosphate compound fertilizer products has increased, the price of raw materials has also risen, which offsets the favorable price increase of phosphate compound fertilizer products, and although the company maintains a low operating rate, it still has to spread the cost of normal operation, so the phosphate compound fertilizer industry can only be capital preservation operation.

This year's volume parity is stable

With the adjustment and optimization of China's national defense policy, the pace of economic recovery is accelerating. However, for the phosphate compound fertilizer industry, from supply to consumption, it is still facing a severe test of energy, raw materials and costs, and it is not expected that there will be a big breakthrough in consumption.


Li Guang pointed out that judging from the current factors, the price of phosphate compound fertilizer will not fluctuate significantly again this year. On the one hand, due to the energy shortage caused by the Russian-Ukrainian conflict last year, the global commodity prices have risen sharply, transmitted to the downstream industry, and the price of phosphate compound fertilizer has also fluctuated sharply. Although the current Russia-Ukraine conflict is not over, the impact of the conflict on energy prices has gradually been digested, and China will also benefit from the relatively stable international energy prices, so the probability of fertilizer production being affected by tight energy supply and large price fluctuations this spring is very small. On the other hand, due to the shortage of global food supply in 2023, the increase in fertilizer consumption is relatively limited, coupled with the slow recovery of the global economy, the market demand for bulk raw materials will not surge and the price of phosphate compound fertilizer will not fluctuate significantly.

Li Guang made a specific analysis of the phosphate compound fertilizer situation in 2023: in terms of phosphate fertilizer, since phosphate ore is a strategic resource, the overall domestic supply will be tight or normal in the future, and the price may remain high; In terms of compound fertilizer, nitrogen fertilizer and phosphate fertilizer will be seasonally adjusted, and the situation of potassium fertilizer import warming has appeared.

Li Guang also emphasized that due to the decrease in China's fertilizer exports last year, the share of phosphorus compound fertilizer industry in international trade has changed, so in the future, the phosphate compound fertilizer industry should re-evaluate the new market model when facing exports.

Future downsizing

"In the future, China's fertilizer industry will face a situation of overcapacity." Li Guang said. Since the "14th Five-Year Plan", China's phosphate fertilizer industry has entered the first five-year plan for capacity reduction, but the matching development concept has not yet been established.

Li Guang believes that because China's grain prices do not have room for a sharp increase, although fertilizer is just needed, it is unlikely to increase the total consumption, superimposed on the current fertilizer industry scale has been limited, so the phosphorus compound fertilizer industry will accept the reality of gradual reduction in scale in the future.

In addition, China's phosphorus resource problem and fertilizer compounding problem will accompany the development of the industry for a long time. In terms of phosphate fertilizer, China's phosphorus resources are limited, but because phosphate ore is a strategic resource, we will definitely face the shortage of phosphorus resources in the future. In this regard, changing the supply mode of phosphorus resources should be a problem for the industry to consider. Li Guang suggested that the supply model of phosphorus resources may be borrowed from the supply model of potash fertilizer, partly supplied domestically and supplemented by imports. In terms of compound fertilizer, China advocates chemical fertilizer compounding, which enjoys the stability of product chemical structure, is conducive to scale and improves the technical barriers between enterprises, but also inevitably reduces the broad spectrum of product use. In the future, the compound fertilizer based on the broad spectrum of compound fertilizer is the transformation direction of compound fertilizer application, and the matching compound fertilizer industry pattern should be the coexistence and development of large enterprises occupying market dominance and small and medium-sized enterprises with special new products.