Regardless of how stringent the administrative regulation is, the trend of oil, coal, and natural gas entering the market-oriented reforms characterized by price increases has become unstoppable. Industry insiders predict that this is a precursor to the real reshuffling of fertilizer production patterns.
It is understood that although China's energy is characterized by lack of oil, gas, and coal, domestic fertilizer production still forms a process route structure using oil, gas, and coal as raw materials. At present, the proportion of domestic urea raw materials is: coalhead enterprises account for 72%, gas head enterprises account for 26%, and the remaining 2% are oilhead enterprises. However, in recent years, especially since May and June of this year, the marketization of the three major raw materials marked by prices has markedly accelerated.
In respect of crude oil, on December 19, 2008, the State Council issued the "Circular on Implementation of the Reform of Refined Oil Prices and Taxes and Charges", which marked an important step towards the marketization of refined oil product reform in China. Since then, the price of oil has risen more and less.
In terms of natural gas, the National Development and Reform Commission raised 230 yuan per 1,000 cubic meters since midnight on June 1, with a price increase of 24.9%. A few days later, the National Development and Reform Commission held a closed-door meeting again, at which the long-term goal of natural gas price reform was formulated, namely, the realization of the marketization of natural gas prices and supervision of upstream pipeline networks and transmission and distribution.
On the coal front, the Ministry of Industry and Information Technology issued a report on July 5 stating that due to the rapid growth of electric power, metallurgy, chemical fertilizers, and building materials industries and the rapid growth of fixed asset investment, China’s coal market experienced strong consumer demand in May, and coal prices rose by 4.7%. The increase was 3.5% higher than in April, and the price increased by 26.2% year-on-year.
According to analysts, under the background of the reform of resource tax, the price changes of oil, gas, and coal are essentially the process of increasing prices. Once the marketization process starts, administrative measures are difficult to control. On June 25, the relevant departments of the National Development and Reform Commission successively cooperated with China Shenhua Group, China Coal Energy Group, Inner Mongolia Yitai Group, Shanxi Tongmei Group, Shanxi Jinmei Group, Shanxi Yangmei Group, Shanxi Coking Coal Group, Henan Zheng Coal Group Conduct a discussion. At the symposium, the National Development and Reform Commission requested state-owned coal companies and industry leading companies to take the lead in maintaining the market's basic coal price stability and not take the lead in rising prices. However, industry sources said that the current coal pricing mechanism has been market-oriented and it is impossible to go back in the future.
The marketization of the three major raw materials will undoubtedly form an overall impact on the fertilizer industry, forcing fertilizer companies of all raw material routes to reconsider the cost performance of raw material routes in accordance with the market laws. The pattern of chemical fertilizer production will have a real reshuffle.
It is understood that although China's energy is characterized by lack of oil, gas, and coal, domestic fertilizer production still forms a process route structure using oil, gas, and coal as raw materials. At present, the proportion of domestic urea raw materials is: coalhead enterprises account for 72%, gas head enterprises account for 26%, and the remaining 2% are oilhead enterprises. However, in recent years, especially since May and June of this year, the marketization of the three major raw materials marked by prices has markedly accelerated.
In respect of crude oil, on December 19, 2008, the State Council issued the "Circular on Implementation of the Reform of Refined Oil Prices and Taxes and Charges", which marked an important step towards the marketization of refined oil product reform in China. Since then, the price of oil has risen more and less.
In terms of natural gas, the National Development and Reform Commission raised 230 yuan per 1,000 cubic meters since midnight on June 1, with a price increase of 24.9%. A few days later, the National Development and Reform Commission held a closed-door meeting again, at which the long-term goal of natural gas price reform was formulated, namely, the realization of the marketization of natural gas prices and supervision of upstream pipeline networks and transmission and distribution.
On the coal front, the Ministry of Industry and Information Technology issued a report on July 5 stating that due to the rapid growth of electric power, metallurgy, chemical fertilizers, and building materials industries and the rapid growth of fixed asset investment, China’s coal market experienced strong consumer demand in May, and coal prices rose by 4.7%. The increase was 3.5% higher than in April, and the price increased by 26.2% year-on-year.
According to analysts, under the background of the reform of resource tax, the price changes of oil, gas, and coal are essentially the process of increasing prices. Once the marketization process starts, administrative measures are difficult to control. On June 25, the relevant departments of the National Development and Reform Commission successively cooperated with China Shenhua Group, China Coal Energy Group, Inner Mongolia Yitai Group, Shanxi Tongmei Group, Shanxi Jinmei Group, Shanxi Yangmei Group, Shanxi Coking Coal Group, Henan Zheng Coal Group Conduct a discussion. At the symposium, the National Development and Reform Commission requested state-owned coal companies and industry leading companies to take the lead in maintaining the market's basic coal price stability and not take the lead in rising prices. However, industry sources said that the current coal pricing mechanism has been market-oriented and it is impossible to go back in the future.
The marketization of the three major raw materials will undoubtedly form an overall impact on the fertilizer industry, forcing fertilizer companies of all raw material routes to reconsider the cost performance of raw material routes in accordance with the market laws. The pattern of chemical fertilizer production will have a real reshuffle.
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