Rising freight rates may affect the existing pattern of fertilizer sales in China
According to the “Circular on Adjustment of Railway Freight Transport Prices†issued by the National Development and Reform Commission and the Ministry of Railways, since May 20th, the freight rates for freight lines for national railways with uniform tariffs have been adjusted, and the average freight rate of goods per ton per kilometer Up 1 point, the adjustment rate is about 5 times the previous time. As a large amount of rail freight, coal, fertilizer and other affected by the tariff adjustment. Reporters learned from many interviews that the increase in freight rates may affect the existing pattern of fertilizer sales in China.
According to the notification of adjustment, the current freight rates for Daqin, Fengshada, Jingyuan, and Jingqin four-line coal remain unchanged, and the Lanzhou-Xinjiang-Alashankou, Nanjiang, Hongling, and Golmud-Lhasa sections of the Qinghai-Tibet line carry goods. The price is based on the uniform tariff of the State Railway. For fertilizer transportation, there is still a concession after the adjustment of railway freight rates, and the implementation of the fertilizer tariff was adjusted from 7.26 to 8.26 points per ton.
Wang Ming, deputy director of the Institute of Integrated Transportation Research under the National Development and Reform Commission, pointed out that the impact of railway tariff adjustments on prices is limited, while iron ore, grain, fertilizer, etc., have a greater impact on railroad cargo.
Guan Haizhou, manager of sales department of Henan Xinlianxin Fertilizer Co., Ltd., introduced that the adjustment resulted in a 1,000-kilometer transportation fee per ton of fertilizer that rose by 10 yuan. It has a greater impact on long-distance transportation, and it is a one-on-one (raw material, product output) per ton. It will increase the cost by 20 yuan, and it will increase 20-30 yuan in Guangdong, Guangdong, and Northeast markets. It is understood that Xinlianxin has 500,000 tons of urea per year and about 200,000 tons of compound fertilizer needs to be shipped outside. The average transport cost per ton is calculated at 1,000 kilometers. The urea cost will increase by 5 million yuan. The impact of compound fertilizer costs is even greater, because the raw materials for compound fertilizers, such as phosphorus and potassium, require 100% rail transport, and the cost increases even more. Many fertilizer company owners analyzed that rising freight rates will drive up the price of fertilizers accordingly, and compound fertilizers will be higher.
The companies interviewed in Henan, Shanxi, Shandong and other provinces that produce large quantities of chemical fertilizers have been informed that this increase in tariffs will have an impact on the current pattern of fertilizer sales in China. Fertilizer companies in the southeastern provinces of Hubei, Jiangsu, Zhejiang and other provinces have some water transportation channels, which are less affected. In the northwestern region, although the market for fertilizers is outside the country, the cost of outbound transportation has increased, but there is no pressure for raw materials to enter; the most pressure is raw materials and The enterprises with “two out of the market†in the market, especially those in Shandong and Henan. At present, the products of Shandong, Henan and Shanxi fertilizer production enterprises are mainly sold to the Northeast and Guangdong and Guangxi. The rise in railway freight rates has made it increasingly unrealistic for these companies to transfer their chemical fertilizers to the Northeast. Their existing markets may be replaced by companies in Inner Mongolia and other places, and they can only compete locally or open markets in the Southeast.
At the same time, all fertilizer companies are aware of the fact that the country's various preferential policies will only decrease, and the speed of industry consolidation will accelerate. Fertilizer companies must develop hard work, strengthen management, and actively carry out industrial upgrading, and increase profits by reducing consumption and increasing product technology content.
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