Last week (March 25, 2019 – March 29, 2019), the market demand was insufficient and the price of potassium chloride continued to fall. On April 1, China’s Wholesale Potassium Chloride Price Index (CKPI) was 2231.82 points, down 1.91 points, or 0.09%. It rose 134.69 points, or 6.42%. It fell 1058.78 points, or 32.18%, compared with the base period.

Supply Situation: In terms of domestic potassium, Qinghai Salt Lake plant operates normally with a daily output of about 14,000 tons; the arrival price of 60% crystal powder of the base product maintains 2,350 yuan/ton, and the rebate policy is 30-50 yuan/ton; the start-up of small factories in Qinghai has not been fully restored, and the regional transaction price is about 2,300-2,350 yuan/ton. As for imported potassium, the arrival of potassium in the port continued to increase, with the stock of more than 2.1 million tons. Influenced by the increase of inventory pressure, some traders reduced their prices to about 2 350-2 380 yuan/ton with 62% Russian-white potassium quotation. As for potassium frontier trade, a small amount of new supply is replenished, the stock is general, and the sale is mainly in the Northeast market. The price of 62% Russian-white potassium is maintained at about 2150 yuan/ton.

Demand situation: The main fertilizer for agricultural spring tillage is nitrogen fertilizer, but the demand for potassium fertilizer is insufficient. The shipment of compound fertilizer enterprises improved, and the start-up rate of some enterprises increased. The overall start-up rate of compound fertilizer enterprises increased by 0.96 percentage points to 45.13 percent from the previous week, an increase of 5.13 percentage points over the same period last year.

Sodium Molybdate

International market: International potassium chloride prices fell slightly last week. In recent years, the demand of international potash fertilizer market has been slightly weak. In Brazil, the price of potassium chloride has fallen; in Europe, the market demand is still good. In terms of price, the offshore prices of potassium chloride in Canada, the Russian Federation, Jordan and Israel fell by $5-8 per ton at the high end, which were $257-298 per ton, $243-310 per ton, $267-287 per ton and $267-311 per ton respectively; the offshore prices of potassium chloride in Brazil fell by $5 per ton at the low end and $5 per ton at the high end, which were $340-350 per ton; and the offshore prices of potassium chloride in Southeast Asia remained stable at $295-315. Tons per ton.

Table 5: International Potassium Chloride Price Change Table

产品 区域 涨跌幅度

Products: Regional Range of Rise and Decline

（美元/吨） 现货价格（美元/吨）

Spot price (US dollar/ton)

2019-3-28 2019-3-21

2019-3-28 2019-3-21

氯化钾

potassium chloride

(FOB散装) 加拿大 0-↓5 257-298 257-303

(FOB Bulk) Canada 0-5 257-298 257-303

俄联邦 0-↓5 243-310 243-315

Russian Federation 0-5 243-310 243-315

约旦 0-↓8 267-287 267-295

Jordan 0-8 267-287 267-295

以色列 0-↓5 267-311 267-316

Israel 0-5 267-311 267-316

CFR东南亚 0-0 295-315 295-315

CFR Southeast Asia 0-0 295-315 295-315

CFR巴西 ↓5-↓5 340-350 345-355

CFR Brazil_5-5 340-350 345-355

Source of data: collated according to relevant materials

Domestic market: The price of potassium chloride in domestic market has dropped slightly recently. According to the monitoring data of the association, the wholesale prices of the domestic potassium chloride provinces in Hunan and Hubei fell 50 yuan/ton and 43.3 yuan/ton respectively compared with the previous week, while the prices of other provinces remained stable; the wholesale prices of imported potassium chloride provinces in Yunnan, Hubei and Fujian fell 170 yuan/ton, 125.6 yuan/ton and 50 yuan/ton respectively compared with the previous week, while the prices of other provinces remained stable.

Gamma-PGA (gamma polyglutamic acid)

 

表6：国内氯化钾价格变动表

Table 6: Price Change Table of Potassium Chloride in China

品种 省份 2019-3-28

Varieties Provinces 2019-3-28

(元/吨) 2019-3-21

(yuan/ton) 2019-3-21

(元/吨) 涨跌幅

(Yuan/ton) Increase or decrease

(元/吨) 环比

(yuan/ton) ring ratio

Domestic potassium chloride

批发价 湖北 2,340.0 2,383.3 -43.3 -1.8%

Wholesale Price Hubei 2,340.0 2,383.3-43.3-1.8%

湖南 2,270.0 2,320.0 -50 -2.2%

Hunan 2,270.0 2,320.0-50-2.2%

Import potassium chloride

批发价 福建 2,775.0 2,825.0 -50 -1.8%

Wholesale Price Fujian 2,775.0 2,825.0-50-1.8%

湖北 2,660.0 2,785.6 -125.6 -4.5%

Hubei 2,660.0 2,785.6-125.6-4.5%

云南 2,280.0 2,450.0 -170 -6.9%

Yunnan 2,280.0 2,450.0-170-6.9%

Data Source: China Agricultural Circulation Association

At present, the market is abundant in potassium fertilizer supply, traders are forced by inventory pressure, the price of shipment is loose, and the price of potassium chloride has dropped slightly. In the future, in the domestic market, compound fertilizer enterprises will enter the summer fertilizer production period to support the demand for potassium fertilizer; in the international market, the purchase of new international potassium fertilizer orders or delayed until mid-April, it is difficult to improve at present. In summary, it is expected that the domestic price of potassium chloride will stabilize and consolidate in the short term, focusing on the salt lake price policy and the start-up rate of compound fertilizer enterprises.

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Crude Oil Market: Brent closed at $69.18 a barrel last night (3 a.m. Beijing time, April 2), up $1.19 from the previous deal.

Potassium monopersulfate

Price dynamics: on April 2, Qilu Petrochemical quoted 4200 yuan/ton, down 400 yuan/ton from the previous trading day; Yangzi Petrochemical quoted 4250 yuan/ton, down 400 yuan/ton from the previous trading day; Hainan Refining and Chemical quoted 4250 yuan/ton, down 400 yuan/ton from the previous trading day; Wuhan Ethylene quoted 4250 yuan/ton, down 400 yuan/ton from the previous trading day; Huaxing Petrochemical quoted 4150 yuan/ton, down from the previous trading day. The daily quotation of Zhenghe Petrochemical Company was reduced by 200 yuan/ton, and the quotation of Zhenghe Petrochemical Company was 4150 yuan/ton, which was 200 yuan/ton lower than the previous trading day.

Azodicarbonamide (AC foaming Agent)

Analytical Comments: Petroleum benzene market inventory continues to be high, downstream demand is weak. The listing price of Sinopec’s enterprises was lowered by 400 yuan/ton, and that of Sinopec’s enterprises by 200 yuan/ton.

U.S. WTI May crude oil futures electronic disk closed Monday (April 1) up $1.63, or 2.71%, to $61.77 a barrel. Oil prices rose more than 2% on Monday to a year-high of $69 a barrel, after positive signs from the global economy and tightening crude oil supply helped U.S. oil and oil to record their best first quarter performance in nearly a decade.

EDTA

Meanwhile, ICE Brent crude oil futures closed up $1.64, or 2.43%, at $69.22 a barrel in May.

Sino-US economic data are improving to alleviate market worries about economic prospects

John Kilduff, a partner of Again Capital Management, a hedge fund, said the combination of good manufacturing purchasing managers’indices (PMI) in the United States and China, the world’s two largest economies, boosted oil prices. A series of weak economic data brought about by the greater resistance to ease today, so the bullish theme has not been suppressed.

Stock markets in the United States rose after strong manufacturing data from the United States and China eased fears of a slowdown in global economic growth.

In March, China’s manufacturing activity unexpectedly grew for the first time in four months. U.S. manufacturing data in March were also better than expected, leaving investors unhappy with the weak February retail sales data.

Melamine

Jim Ritterbusch, president of Ritterbusch and Associates, said the bull market in the energy market had entered its fourth month and seemed able to continue.

OPEC production cuts and Venezuelan export declines support oil prices

The survey showed that OPEC’s oil supply fell to a four-year low in March as Saudi Arabia, the largest exporter, overfulfilled its output reduction agreement, while Venezuela’s oil production declined further due to sanctions and power outages.

A monthly survey released on Friday showed that analysts were cautiously optimistic about the oil market, raising their forecast for the average price of oil in 2019 to $67.12 for the first time in five months.

The Commodity Futures Trading Commission (CFTC) said on Friday that hedge funds and fund managers’bullish bets on U.S. crude oil rose to their highest level in more than five months.

Intercontinental Exchange (ICE) data show that in the week ending March 26, Brent crude oil speculators’net long positions increased by 13,429 to 322,035, the highest level since the end of October last year.

Baker Hughes, an energy services company, said U.S. energy companies last week lowered the number of oil rigs to the lowest level in nearly a year, with the largest decline in the first quarter of this year for three years.

Benzalkonium chloride

Sometimes I just wonder: if there is no urea in this spring market, will it sink? Okay, thank you for urea! With the rising of nitrogen fertilizer, the market of phosphorus and compound fertilizer has been sounding good, so there are half-truths and half-falsehoods in the industry jokingly said: “It is all rising, there is no reason for potash fertilizer itself to continue to fall?” Well, although today is April Fool’s Day, but the author seriously said: April potassium chloride is indeed a little hopeful! The reasons are as follows.

Gamma-PGA (gamma polyglutamic acid)

From historical experience, the price of potassium chloride is expected to rebound ahead of time. In January-April 2017, the price of potassium chloride fell. The mainstream price of 62% white potassium in the port dropped from 2100 yuan (ton price, the same below) to 1950 yuan, a drop of 150 yuan. There was a slight rebound in May and June, and the basic stability was between 1950 and 2000 yuan. At that time, the apparent cost was about 1900 yuan, and the importer was slightly profitable. _January 2018 potassium chloride rally came to an end, February to April turned back to fall, 62% of the mainstream port white potassium price from 2250 yuan to 2150 yuan, a decline of 100 yuan. In May and June, there was a significant rebound, rising to 2300 yuan. At that time, the apparent cost was about 1,800 yuan, and the importer was profitable. In the first quarter of 2019, the price of potassium chloride has been falling. The mainstream price of 62% white potassium in the port has dropped from 2550-2600 yuan to 2350 yuan, a drop of more than 200 yuan. Now the apparent cost is about 2300-2350 yuan, and the importer has reached the edge of loss. From the above comparison, we can see that there is no inevitable causal relationship between price fluctuation and price itself, and the thickness of seller’s profit. But this spring, potassium chloride market is poor, importers are under great pressure, so it is natural that we will try our best to stabilize the decline and find opportunities for a rebound.

_In April 2017, the price of potassium chloride has been slowly declining for a whole month, and temporarily stabilized until the end of the month. The monthly decline of port standard potassium and domestic potassium is about 50 yuan, that of border trade potassium is 50-100 yuan, and that of port Dahong granule is the biggest, reaching 150 yuan. By May, due to a slight increase in demand, urea and monoammonium, especially the return of potassium frontier trade from the low end in late April, and the low pressure of its own port storage, the overall price of potassium chloride gradually rebounded. In April 2018, the domestic potassium chloride dropped 50-100 yuan, the port potassium chloride dropped nearly 50 yuan, the port potassium granule dropped 50 yuan at the low end but increased 50 yuan at the high end, and the advance price of potassium chloride in border trade rose 50 yuan because there was no goods. Since May, the rise of white potassium in the port has gradually led the overall price of potash fertilizer into an upward channel. At that time, there were many supports, such as the extension of large contract negotiations, the state storage inspection, the port logistics tension, and so on. So what do we have in April this year, in contrast to the market factors during the bottoming rebound of the previous two years? Frontier trade quotation rebounded by more than 50 yuan, the price of large granular potassium in Northeast Port began to be pulled up, logistics in some areas began to be tense, big contracts had not yet been negotiated, and urea continued to rise, compound fertilizer rebounded, and phosphate fertilizer gradually stabilized, especially there was not much room for further reduction in cost. So from historical experience, the market situation in April this year has been similar to that of May rebound in the previous two years. This year’s price has fallen earlier than the previous two years, and there is not a lot of inventory in the early downstream, so it is possible to rebound earlier in April this year.

From the perspective of supply and demand situation, we can not rule out the possibility of short-term rebound fluctuations. Since the current customs data are only updated to February, we should first look at the market supply and demand situation in January-February. The import volume of potassium chloride in January-February 2017 was 2.2 million tons, the port stock in early January and the end of February 2017 was 2.3 million tons, and the apparent consumption was about 1.7 million tons; the import volume of potassium chloride in January-February 2018 was 1.92 million tons, the port stock in early January and the end of February 2018 was 2 million tons and 2 million tons, respectively, and the apparent consumption was about 1.9 million tons; the import volume of potassium chloride in November-February 2019 was 2.3 million tons, and the beginning of January and the end of February 2019 At that time, the port stock was 1.8 million tons and 2.7 million tons respectively, and the apparent consumption was about 1.2 million tons. At the same time, the output of domestic potassium Market and stock changes are similar, so far this year’s performance is also an increase in leftovers. That is to say, the decline in market demand this spring is still obvious. But optimists believe that the amount of reduction in the earlier period may be released together in the later period, so a relatively large amount of explosion in a relatively small time, it is possible to form a hot scene. There are some reasons for this statement, but at present, the import volume in March is not small, and the total import volume in the first quarter of this year may also create a new historical record (although the import volume of border trade has decreased), but the demand reduction is inevitable, so under the increase and decrease, even if the late demand is really released later, it should be very difficult to play a big role. Influence. Generally speaking, the long-term trend of potassium chloride is not optimistic in terms of supply and demand situation, but the possibility of a short-term rebound in April can not be ruled out.

Sodium Molybdate

Looking from the market environment, there are long-term pressures but short-term support value-added tax Take the current port price of 62% white potassium 2350 yuan as an example. A 1% reduction in VAT affects the cost of 20 yuan. If the price of importers remains unchanged, their profits will increase by about 4 yuan, but if the price of importers is reduced by 20 yuan, their profits may decrease by 14 yuan. Regardless of the financial factors, simply looking at the 4, 14 or 20 yuan is not a big deal. It is not enough for the market to adjust once. Therefore, the reduction of VAT does not mean that the price of potassium chloride must be reduced. _The price of potassium chloride in the international market has been stable for nearly half a year, but there are some signs of loosening recently, which may be the key factor affecting the long-term trend. But after all, the price has fallen to the apparent cost line, so it will not affect too much for a while and a half. After all, the big contract has not been discussed, and the international situation in the future is likely to change again. _Recently urea has risen sharply, compound fertilizer is rising, and phosphorus fertilizer is stabilizing and trying to rebound. Will potassium chloride fall alone? Although there is no necessary relationship between them, it will undoubtedly reduce the pressure of potash fertilizer to continue to fall in price. In a word, the downward pressure of the price of potassium chloride has not really been relieved from the market environment (the following will be discussed in detail with the fourth point), but it is still possible to get a proper relief in the short term.

From the cost trend, it is not optimistic, so it is not recommended to increase the hoarding price. At present, the apparent cost of 62% white potassium in the port is about 2300-2350 yuan, which is basically the same as the price. The average CIF price of Brazilian Granules in the international market is US$350, and the standard CIF price in Southeast Asia is US$305. From the historical comparison between China and the two major spot markets, the price of US$290 in China may actually be stable. Although it is at least three months before the signing of the big contract in July-September, the international market is likely to change again, considering the situation of supply and demand, economic environment, climate factors and the trend of agricultural products, at least for the moment, the expectation of the international price trend is not ideal, unless there are strikes, railway collapses and water seepage in mining pits in the future. The emergence of a class of sudden and influential events. Therefore, if we talk about the negotiation of big contracts in 2019, the order of the three possibilities should be smaller decline than stability than rise.

_To sum up four points, the author believes that the space and pressure for the price of potassium chloride to fall still exist, but this is a prediction of the long-term trend, or just a worry, so it is not recommended to stock up potassium chloride for the time being. Sellers should “close as they see fit” and should not over-speculate. However, the rebound of potassium chloride in April is likely to occur, especially in the Northeast where logistics is tight and demand is concentrated. Perhaps the rebound will not be underestimated, so the downstream needs to consider whether the demand in April should be properly stored in advance as soon as possible.

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Looking back on March, the urea market price has been rising in succession. The market price of urea has risen from 1850-1900 yuan/ton at the beginning of March to 2050-2100 yuan/ton at present. Domestic urea market is more active, industrial and agricultural demand is more vigorous, urea quotations have increased in varying degrees, manufacturers have more orders, strong willingness to bid, the market is expected to continue to run at a high level in the future.

Strong agricultural demand and high prices

In recent weeks, urea market around the mainstream factory prices continue to break through new highs, the market was not expected to continue to rise, it is shocking. As of this week’s press release, the actual factory price of small particles in traditional urea producing areas in China is 2000-2030 yuan/ton, and that of large particles is 2100 yuan/ton. In less than a month, the price of urea market has risen by 200 yuan/ton. After the Spring Festival last year, urea prices in March were mostly in a downward trend. Why are prices rising all the way this year?

Azodicarbonamide (AC foaming Agent)

Wang Zhiqiang, deputy general manager of chemical industry management center of Shanxi Orchid Science and Technology Venture Co., Ltd., thinks that the rising trend of urea market is mainly affected by the strong demand for agriculture. At present, the Northeast market is actively starting up for farming, but the time is delayed. The southern market will also have the demand for rice fertilizer before and after the Qingming Festival. In this way, the demand for fertilizer in Northeast China and the demand for rice fertilizer in South China will be increased. Time just overlaps, the peak season is shorter and more concentrated than previous years, so price increases are larger.

Wang Zhiqiang said that, on the one hand, with the start of spring farming, farmers are actively preparing for farming, purchasing willingness continues to strengthen, the market gradually warmed up. On the other hand, the urea market as a whole has a low starting rate, tight market supply, prices continue to rise, and market turnover is good.

In summary, the current urea market price has stabilized at a high level of 2,000 yuan/ton. Influenced by favorable factors such as downstream market demand and upstream raw material price support, the recent urea market trading atmosphere has improved, and inventory has remained low. The offer continues to rise. With the operation of the downstream purchase-sale mode, some manufacturers still intend to increase, while the short-term price is running at a high level.

Increased industrial demand to support urea market

Compound fertilizers, which had been depressed before, have recently added a spark to the high price of urea. At present, the compound fertilizer market has changed significantly. In mid-March, the purchasing willingness of raw materials in compound fertilizer and mixed fertilizer factories is strong, and the industrial demand supports the urea market price significantly.

EDTA

It is understood that the current urea mainstream ex-factory quotation in Shandong Province is 2000-2030 yuan/ton, the agricultural market demand basically sweeps away, the industrial market demand continues to develop, and the downstream purchasing quantity increases. At present, the urea raw materials that have arrived in the downstream compound fertilizer enterprises can be maintained at least until the middle of next month. The quantity is too large, and the downstream acceptance of high-price urea is relatively general. In summary, urea overall price has been rising recently, and some wait-and-see distributors began to purchase again. It is expected that although the late quotation has been raised, the purchasing intention of compound fertilizer plants still needs to be paid attention to.

The bullish mentality of the future market is in the majority

Speaking of the future urea market, Zeng Qingliang believed that the peak season of the compound fertilizer market will continue in the short term, which will still support the urea market, and fertilizer will follow in the summer after this wave of market, urea market will show a stable bullish trend.

Wang Zhiqiang is optimistic about the future urea market. He said that due to the extension of fertilizer use period in the Northeast market to the Qingming Festival, there will be more than 10 days to support the urea market. Influenced by tight supply and concentrated demand, urea market prices are expected to remain high and there is still room for growth.

Generally speaking, the overall starting rate of urea enterprises is less than 60%, industry and agriculture have better demand expectations, and most manufacturers have sufficient orders to be issued, less pressure on shipment, factory price mentality is strong, it is expected that the urea market prices will continue to rise in the short term, continuing a steady upward trend.

Melamine

Crude Oil Market: Brent closed at $67.99 a barrel last night (3 a.m. Beijing time, April 1), up $1.47 from the previous deal.

Sodium Molybdate

Price dynamics: on April 1, Qilu Petrochemical quoted 4600 yuan/ton; Yangzi Petrochemical quoted 4650 yuan/ton; Hainan Petrochemical Refining quoted 4650 yuan/ton; Wuhan Ethylene quoted 4650 yuan/ton; Huaxing Petrochemical quoted 4350 yuan/ton; Zhenghe Petrochemical quoted 4350 yuan/ton.

Fluctuation Trend: According to the analysis and prediction of relevant models, the price of pure benzene is stable today compared with the previous trading day.

Analytical Comments: Petroleum benzene market inventory continues to be high, Sinopec and Sinopec Group’s listed price is stable.

Benzalkonium chloride

In recent years, the domestic coal-based polyolefin industry has achieved rapid development, and has become a new bright spot in the olefin industry. As far as polyethylene is concerned, since 2014, the capacity expansion of coal (methanol) olefin plant has been concentrated, resulting in the continuous increase of polyethylene production capacity. Coal chemical plants have been put into operation for five consecutive years from 2014 to 2018, with coal production capacity increasing by 4.24 million tons. Due to the abundant coal resources in the central and western regions and the convenience of local material acquisition, domestic coal chemical enterprises are mostly concentrated in the central and Western regions. As of March 2019, the total domestic polyethylene production capacity reached 18.44 million tons, of which the domestic coal-based polyethylene production capacity reached 454, accounting for 24.6% of the total domestic polyethylene production capacity.

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Production Plan of New Polyethylene Plant in 2019

According to statistics, there are 8 PE units planned to be put into operation in China in 2019, involving a capacity of 3.68 million tons per year. The production units are mainly concentrated in LLDPE/HDPE varieties. From the source of raw materials, coal production capacity is still the main force of capacity expansion, accounting for 41.6% of the total capacity, oil production capacity accounted for 31.2%, LPG accounted for 27.2%. At present, Inner Mongolia Jiutai Co., Ltd. 600,000 tons of coal to olefin project on March 20 upstream MTO plant trial run, full density device follow the test run, has not yet produced products, is expected to open in mid-April.

Coal chemical enterprises usually adopt the marketing mode of combining online bidding and offline planning. In terms of production, coal chemical enterprises generally adopt extensive production scheduling, once the production cycle is generally longer, the output is large, which has a greater impact on the market supply. In recent years, coal chemical enterprises have made breakthroughs in research and development of technology, equipment and catalysts. New brands of coal-based polyolefins have emerged in endlessly. With the continuous enrichment of coal chemical products, the market share of coal-based olefins products has further increased. Generally speaking, the production capacity of coal-based polyethylene enterprises will continue to increase in the later period, and the impact on the market can not be underestimated.

Gamma-PGA (gamma polyglutamic acid)

Agrimin is considering a 388-kilometre transport route and a Mackay potassium sulphate plant in Wyndham.

Sodium selenite

At the end of last year, Agrimin had submitted five applications for exploration permits covering Lake Percival, located in the desert about 450 kilometers southeast of Broome, at 2792 km2. Percival Lake has the highest potassium taste in Australia’s salt lakes. The company extracted evaporated salts from previous Lake Mackay tests and produced potassium sulfate samples from them.

Iran’s Ministry of Agriculture has recently received tender orders for potassium fertilizer, including 30,000 tons of potassium chloride and an unknown quantity of potassium sulfate. According to the outside world, there is no European supplier in this tender, which may be related to EU and UN sanctions, and the most likely source of potassium sulfate is from China.

EDTA 2Na

The domestic potassium sulphate market has not changed much. The price of manufacturers in North China has increased slightly compared with the previous period. Because of the lower price in the earlier period, the price has increased greatly after the order has improved. At present, the factory quotation is higher, but the new orders are not active. The price of Mannheim potassium sulfate 50% powder is limited downstream acceptance. The mainstream ex-factory price of Mannheim potassium sulfate 50% powder is about 2850-3100 yuan/ton, and 52% powder ex-factory price is about 3000-3200 yuan/ton. The actual transaction discount range is about 50 yuan/ton. The mainstream arrival quotation of powdered potassium sulfate in Qinghai water-salt system is 2800-2850 yuan/ton, 51% powdered 3100 yuan/ton, 3250 yuan/ton, 52% powdered 3150 yuan/ton, 3300 yuan/ton, and 50 yuan/ton for acceptance. The actual turnover of 51% of the powder in the region is 2850-2900 yuan, and 52% of the powder is about 2900-2950 yuan/ton.

At present, the domestic potassium fertilizer market is steadily advancing, the domestic potassium shipment is normal, new imports of potassium have crossed the shore one after another, the price is temporarily stable, the international potassium fertilizer market is in a situation of low demand and high supply, and the price of some areas has slightly declined. Therefore, it is expected that the domestic and foreign potassium fertilizer market will remain weak in the short term.

Azodicarbonamide (AC foaming Agent)

“At present, the carbon black industry is encountering four major problems: excessive capacity structure, low industry profits, disorderly market competition, and severe export situation.”

Talking about the realistic problems faced by the high quality development of the industry, Wei Ming, chairman of the carbon black branch of China Rubber Industry Association, said.

This was learned from the 2019 China Carbon Black Annual Conference and Membership Conference held on March 14.

EDTA

Structural overcapacity

Wei Ming said that since 2002, China’s carbon black production capacity has maintained an annual growth rate of nearly 400,000 tons.

By 2018, China’s total carbon black production capacity reached 7.52 million tons, with a production of only 5.7 million tons. The industry has a serious overcapacity.

In the next two years, there will still be large additional capacity, and the problem of overcapacity in the industry will become more prominent.

Low Profit in Industry

Wei Ming emphasized that with the change of national macro-policy and the weakness of downstream tire market, the situation of carbon black industry continued to decline, and the average start-up rate of the industry in the past five years was only about 70%.

From 2009 to 2018, China’s carbon black industry has made considerable progress, but its profit margin is at a low level. Until 2017, the whole industry had been in a slight profit, even in 2015 a loss.

Last year, the industry’s profit margin was only 7%. It is expected that the situation in 2019 will be even worse.

Market disorder competition

Melamine

Wei Ming said that with the increasing contradiction between supply and demand, the pressure of operation of enterprises in the industry is increasing, the competition of market homogenization is intensifying, and the business situation of enterprises is becoming more and more difficult.

Due to the lack of effective market regulation mechanism, in order to compete for limited market resources, carbon black enterprises blindly rush to buy raw materials and products to continuously reduce prices, seriously disrupting the market and accelerating the decline of the market.

Export situation is still grim

Wei Ming pointed out that because the distribution of Chinese carbon black enterprises is only in China, the export situation depends mainly on the price difference between global oil for carbon black and domestic coal tar series resources for carbon black.

In recent years, global oil prices have been operating at a low level, while domestic coal tar has been a popular product with high price fluctuations. China’s carbon black enterprises lost their export price advantage.

With the problems of anti-dumping and green technical barriers facing the export market, part of the carbon black production originally planned for export has been transferred to the domestic market, which makes domestic competition increasingly fierce.

Benzalkonium chloride

On March 29, the 5th China Commodity Industry Forum hosted by Xinhu Futures was held in Shanghai. In the afternoon colored sub-forum, Aladdin Sino-Ying Network Aluminum Research Institute President Shi Fuliang from the current market more concerned about the alumina problem, the aluminium market was analyzed.

Sodium Molybdate

From the current production of alumina, it can be seen that there is a steady growth trend. As of March this year, domestic alumina production capacity was 84.17 million tons, and operating capacity was 73.75 million tons. However, with the slowdown of demand growth, the growth rate of alumina production began to decline significantly from last year. Last year, China’s alumina production showed a trend turning point, with annual output of 71.61 million tons, an increase of 1.5% over the same period last year.

Looking at this year’s performance of alumina, he believes that supply tension will ease relatively, and global supply and demand fluctuate around the balance line. “The main variables affecting supply and demand this year focus on imports and exports, and the most direct correlation is the possibility of the first half recovery of the Brazilian alumina plant in Hyderu. Exports are currently expected to remain unchanged in the first quarter, but uncertainty increases in the second half of the year. He said that the supply of domestic alumina is increasing. If there is no special export situation, the supply of alumina is still under great pressure.

Gamma-PGA (gamma polyglutamic acid)

In terms of policy, he said that after the reform of supply side of electrolytic aluminium, the state will further introduce the regulation and control policy of alumina. At present, bauxite has become the core focus of the market. With the continuous stringent environmental protection policy, the examination and approval of mining rights continue to be strict, and the production capacity of inland alumina has expanded, and the supply and demand pattern is still tense.

In terms of price performance, alumina prices have been driven by rising costs for a long time, and in the short run by Alunorte’s 50% capacity reduction and Russian and Aluminum sanctions. As costs continue to rise, industry profits will be squeezed.

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