Recently, the National Development and Reform Commission announced that in 2006 the country will continue to impose tentative tariffs on exports of urea, from January to September the tariff rate is 30%, and from October to December it is 15%; and this year it will continue to suspend urea and diammonium phosphate. , monoammonium phosphate and other fertilizer products export tax rebate. In response, Liu Huiyun, secretary-general of the China Nitrogen Fertilizer Industry Association’s Large and Middle Nitrogen Branch, said in an interview with reporters this year that the tentative tariff rate for exports this year will have a major impact on the domestic urea industry and enterprises. Current enterprises have responded strongly to this, the Nitrogen Fertilizer Association. On the one hand, through various means, it is hoped that enterprises can proceed from the overall interest and actively implement national policies; on the other hand, they are appealing to relevant departments, hoping that the change in the export tariff rate of urea will be determined according to the actual conditions of the domestic urea market, and should be based on a quarterly To adjust the unit.
It is understood that since last year, the national veterinary product introduced before the VAT return (later duty-free), increase the urea export tariffs and other tax policies, to ensure the domestic chemical fertilizer supply, stable fertilizer prices have shown a regulatory effect. Exports decreased by about 40% year-on-year, and more urea products were left in the country, playing the role of a 'reservoir', and the price rise of urea was compressed. However, from October last year to the end of last year's urea price changes, this year's domestic urea price trend will show a downward trend, the market situation is not optimistic. Secretary-General Liu Huiyun believes that if the market situation has undergone major changes, if the same urea export tariff rate as last year is implemented, it will obviously be detrimental to large and medium sized urea companies.
The first is that the total supply of urea in the country has long exceeded supply. Judging from statistics released by the National Development and Reform Commission on urea capacity during the 10th Five-Year Plan, domestic urea production in 2005 is expected to reach 20.4 million tons. According to conservative estimates, the domestic urea production capacity in 2005 will be about 4 million tons higher than in 2004, and this year's production capacity will also increase. However, the domestic demand for urea products in 2006 was a relatively constant figure, and it is expected to remain the same as last year. Moreover, as farmers’ enthusiasm for scientific fertilization increases, the corresponding imbalance between the domestic demand for urea and the increase in urea production capacity will further increase. Where so many urea goes will become a big problem.
Secondly, at present, the majority of fertilizer companies are not active in light storage. One of the reasons is due to the non-optimistic expectation of future urea price trends. Since October 2005, the domestic urea price has begun to decline, and it is close to the level of the same period in 2004, and it is still declining at the end of December 2005. At the beginning of this year, although the spring plowing was about to start soon, the price of urea still showed no sign of rising. Therefore, although there are many factors that affect the enthusiasm of the company, the company's concern about the uncertainty of the urea price trend is absolutely the most important lever.
Third, from the current situation, the largest affected by export restrictions should be large and medium-sized urea companies. Fertile fertilizer in Hainan Fudao is a typical example. Because of its geographical location, the island’s fertiliser shipping conditions are excellent. Due to the congenital export conditions, coupled with the limited demand for urea products on the island, exports have become the most important sales channel for Hainan-rich island fertilizer. Therefore, such a high export tariff will have a particularly great impact on Fu Island, Hainan. They also called for this several times, but the reality forced it to ship products to the coastal areas such as Zhejiang for sale. As a large-scale enterprise with 1.4 million tons of urea capacity, its products are bound to have an impact on the domestic market. For other large and medium-sized enterprises that have export products, this year's increase in domestic natural gas, coal and other raw material prices and power prices will inevitably affect the increase in chemical fertilizer costs. If exports are limited, it will inevitably cause further competition in the domestic market. Falling prices and reducing profits will be inevitable.
Fourth, the 'going out' strategy has always been respected by domestic fertilizer companies. China's accession to the WTO also promises to fully open up the domestic fertilizer market. Although we also imposed temporary export tariffs last year, it was still a fixed number of 260 yuan/ton. This year, it will become 30% from January to September and 15% from October to December. This will not only harm the company’s consolidation of existing overseas sales channels, but also open up new markets for the future of the company after opening up the domestic market. unfavorable.
In spite of the above reasons, Liu Huiyun still pointed out that subjecting to the policy of 'increasing the total amount of domestic resources and ensuring the supply of fertilizers in the peak season' is still an enterprise's duty. And in the long run, this move, after all, can play a role in the survival of the fittest in the domestic fertilizer industry. Only this year's situation has changed greatly compared to last year. Under the combined effect of multiple factors such as a large increase in total resources, flat demand last year, and a significant increase in costs, the market situation is not optimistic. Therefore, Liu Huiyun believes that it is very necessary to change the provisional tariffs for export according to the actual market conditions.
It is understood that since last year, the national veterinary product introduced before the VAT return (later duty-free), increase the urea export tariffs and other tax policies, to ensure the domestic chemical fertilizer supply, stable fertilizer prices have shown a regulatory effect. Exports decreased by about 40% year-on-year, and more urea products were left in the country, playing the role of a 'reservoir', and the price rise of urea was compressed. However, from October last year to the end of last year's urea price changes, this year's domestic urea price trend will show a downward trend, the market situation is not optimistic. Secretary-General Liu Huiyun believes that if the market situation has undergone major changes, if the same urea export tariff rate as last year is implemented, it will obviously be detrimental to large and medium sized urea companies.
The first is that the total supply of urea in the country has long exceeded supply. Judging from statistics released by the National Development and Reform Commission on urea capacity during the 10th Five-Year Plan, domestic urea production in 2005 is expected to reach 20.4 million tons. According to conservative estimates, the domestic urea production capacity in 2005 will be about 4 million tons higher than in 2004, and this year's production capacity will also increase. However, the domestic demand for urea products in 2006 was a relatively constant figure, and it is expected to remain the same as last year. Moreover, as farmers’ enthusiasm for scientific fertilization increases, the corresponding imbalance between the domestic demand for urea and the increase in urea production capacity will further increase. Where so many urea goes will become a big problem.
Secondly, at present, the majority of fertilizer companies are not active in light storage. One of the reasons is due to the non-optimistic expectation of future urea price trends. Since October 2005, the domestic urea price has begun to decline, and it is close to the level of the same period in 2004, and it is still declining at the end of December 2005. At the beginning of this year, although the spring plowing was about to start soon, the price of urea still showed no sign of rising. Therefore, although there are many factors that affect the enthusiasm of the company, the company's concern about the uncertainty of the urea price trend is absolutely the most important lever.
Third, from the current situation, the largest affected by export restrictions should be large and medium-sized urea companies. Fertile fertilizer in Hainan Fudao is a typical example. Because of its geographical location, the island’s fertiliser shipping conditions are excellent. Due to the congenital export conditions, coupled with the limited demand for urea products on the island, exports have become the most important sales channel for Hainan-rich island fertilizer. Therefore, such a high export tariff will have a particularly great impact on Fu Island, Hainan. They also called for this several times, but the reality forced it to ship products to the coastal areas such as Zhejiang for sale. As a large-scale enterprise with 1.4 million tons of urea capacity, its products are bound to have an impact on the domestic market. For other large and medium-sized enterprises that have export products, this year's increase in domestic natural gas, coal and other raw material prices and power prices will inevitably affect the increase in chemical fertilizer costs. If exports are limited, it will inevitably cause further competition in the domestic market. Falling prices and reducing profits will be inevitable.
Fourth, the 'going out' strategy has always been respected by domestic fertilizer companies. China's accession to the WTO also promises to fully open up the domestic fertilizer market. Although we also imposed temporary export tariffs last year, it was still a fixed number of 260 yuan/ton. This year, it will become 30% from January to September and 15% from October to December. This will not only harm the company’s consolidation of existing overseas sales channels, but also open up new markets for the future of the company after opening up the domestic market. unfavorable.
In spite of the above reasons, Liu Huiyun still pointed out that subjecting to the policy of 'increasing the total amount of domestic resources and ensuring the supply of fertilizers in the peak season' is still an enterprise's duty. And in the long run, this move, after all, can play a role in the survival of the fittest in the domestic fertilizer industry. Only this year's situation has changed greatly compared to last year. Under the combined effect of multiple factors such as a large increase in total resources, flat demand last year, and a significant increase in costs, the market situation is not optimistic. Therefore, Liu Huiyun believes that it is very necessary to change the provisional tariffs for export according to the actual market conditions.
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