Shanghai Securities: The peak of summer use of fertilizer

We think that in the middle of May, the fertilizer market will be effectively improved, because this time period if we do not consider taking goods, some of the market in the summer after the advent of fertilizer, the market can not guarantee sufficient supply to operate.　　In addition, 09 is a leap May, summer fertilizer will be postponed, so the sales season in mid-May may be postponed to late May or early June. Shanghai Securities Zhou benefit from the stimulation of spring plowing and fertilizer preparation, fertilizer sales in the first quarter, the price of urea, phosphate fertilizer, potash fertilizer in the first quarter of 2-March all showed a significant increase; high inventory digestion, urea digestion faster than phosphate, in the end of the first quarter, some phosphate fertilizer enterprises still have inventory has not yet digested　　Demand for urea is still the most stable. At present, the international fertilizer demand is very weak, the price has been lower than the domestic market price, with the domestic demand for fertilizer gradually weakened, domestic fertilizer enterprises will face the double pressure of domestic and foreign markets.　　However, the supply of chemical fertilizer in China is mainly realized through the fertilizer light storage, our country since 2005 to implement the policy of fertilizer, light storage main varieties for urea, the current light storage total size of 11 million tons, accounting for the annual production of about 20%. Agricultural "State Eight" regulation to ensure the supply of agricultural supplies, the country will pay more attention to the implementation of weak reserve policy.　　In addition, farmers ' income and fertilizer investment show obvious positive correlation, the increase of grain purchase price and the increasing of agricultural subsidy will make the farmers ' grain income increased, so as to increase farmers ' enthusiasm for planting grain and promote the demand of fertilizer. Urea consumption season is coming the price of urea in late March to reach high, some of the factory prices to 2100 yuan/ton. But with the increase in export tariffs and supply of gradually abundant, downstream of the sentiment quickly subsided, the market showed a tepid situation. Urea prices since late March began to slow down, April still belongs to the domestic fertilizer season, the price to maintain a slight decline in the situation.　　and the international market of urea continued weak, export situation is not optimistic, off-season prices will bear greater pressure.　　Into the early May, some of the market ready fertilizer near, affected by various factors, this phase will enter the procurement period of some dealers, by the psychological impact of the quarter, it is expected that this stage dealers will not be a large number of stock, grassroots supply is still the characteristics of the entire market. We believe that the market will be effectively improved in mid-May. Mainly consider in this time period if you do not consider the case of taking goods, transport and other factors, the impact of some market summer with fertilizer, the market can not guarantee sufficient supply to operate. This stage outside the expected factory prices will stabilise, dealers have become sensible, the market will not be like the spring market such a high price appeared.　　In addition, 09 is a leap May, summer fertilizer will be postponed, so the sales season in mid-May may be postponed to the beginning of May late June. Inner Mongolia million tons of urea project cost is very low, optimistic about Hubei province, farmers in the region for chemical fertilizer price fluctuation tolerance strong, pay close attention to Huachang Chemical industry; Hua Lu due to advanced technology and stable historical operating conditions,Attention. Ammonium phosphate market to smooth with the entry into the May, the domestic spring market, the end of the local use of fertilizer significantly reduced, dealers have to inventory inventories, and preparation of summer dressing, to two of ammonium concern significantly reduced, in addition to the north of Heilongjiang and east China still has a small amount of sporadic use of fertilizer, the Due to international price restrictions on factories, export prospects are not clear, therefore, I hope that with the fat area in the fall with large dealers in advance to do the Fed marketing, not backlog too much inventory and occupation of funds, but the dealer to this cautious attitude, even if there will be fertilizer to the minimum guarantee, the overall market is not optimistic to make the attitude more cautious. And even in accordance with the current international price to convert, the export situation of domestic enterprises are not optimistic, in order to FOB320 dollar, June tariff reduction to 10%, its conversion into RMB price is only about 2180 yuan, but remove tariffs and freight, Hong Kong incidental charges, the average factory price less than 1900 yuan/ton,　　Therefore, exports are also difficult to pull domestic market, is expected to be the entire May domestic ammonium two industry will be stable, medium-sized enterprises continue to stay on the sidelines, limiting the situation, and opportunistic exports, large enterprises in the export-oriented, and small enterprises to stop production, it is difficult to participate in the international competition.　　Continue to optimistic about the advantages of phosphate rock resources, hot-acid, the cost is not affected by sulfuric acid, the export of products are not affected by special tariffs of Hing Fat Group, Cheng Star shares; Due to the expected deterioration in inventory will benefit from export policy changes, profit expectations will be greatly improved, suggesting that the recent focus on Hubei Yi. Salt Lake Potash Fertilizer Price Promotion International Fertilizer Industry Association (IFA) 's latest report shows that global potash production fell by 3% in 2008, from about 33.4 million tonnes in 2007 to 32.4 million tonnes, and deliveries from 33.8 million tonnes to 31.7 million tonnes, down 6.3%, and exports to 8.6% per cent year-on-year. To about 24.9 million tonnes. Currently, the world's leading potash producers are still in the process of reducing output, according to the Belarusian National Statistical Commission reported that the first quarter of this year's potash production decreased by 59.2%, to 579,500 tons, compared to the same period of 1.4203 million tons of 840,800 tons.　　In addition, the Russian Silvinit first-quarter potash production reduction of 501 million tons, the current operating rate is still low level. Manufacturers in the first quarter to achieve a certain effect, the potash market in the last one months more active, Canpotex, K+s, BPC, ICL are 750 U.S. dollars/ton of MOP Price (CFR) to Brazil and Southeast Asia to sell 350,000 tons, PotashCorp and Colombia hammered out a second-quarter supply price of $750.　　Market prices are stable in the short term. However, the international potash market is still not optimistic, the North American farmers this year to reduce the amount of potash fertilizer 40%, North American potash stocks continue to maintain more than 4 million tons. And China's stock of potash is kept at a higher level, which will cause some pressure on the final price of China's potash imports in 2009-2010.has become an important factor affecting the future trend of international potash fertilizer prices. At present, the domestic market price of potassium sulfate from 3800-4200 yuan, on the one hand, the price of raw materials down, some dealers are expected to start to reduce, on the one hand, demand is not flourishing.　　Some companies still in the car said that although the recent sharp decline in potassium chloride, but because enterprises are raw materials, there is still no intention to reduce prices. Recently, Salt Lake Potash fertilizer will be the ex-factory price of potassium chloride from 3800 yuan/T down to 3250 yuan/t, clean up the inventory; At the end of April 2009, China imported potash fertilizer port 2.1825 million tons, April 2008 last import potash deposit of 1.9491 million tons, the same period compared to a 11.97% increase. Domestic potash dealers will be more hope in the summer market, so this month, a variety of city sales policy. The first is the April 14 medium-and some agricultural companies in Shanghai held a potash market coordination meeting, the formation of a temporary price alliance, trying to the time limit the steady increase in promotional means to pull the market boom.　　Many small and medium-sized dealers have to lower prices to foreign quotes, followed by the importer to domestic production enterprises, are in the release of a variety of market-driven policies. With the investment rating in summary, we maintain an "attractive" rating for the fertiliser industry over the next 12 months. Shares continue to be optimistic about Cheng star shares, Hing Fat Group, Hubei Yi; Although Salt Lake potash fertilizer in the short term potassium chloride factory prices, but we still optimistic about the future, maintain "super strong City" rating.