Development and Reform Commission Urgently Discusses Chemical Fertilizer Coal
Recently, a reporter learned from an interview with the Information Department of the China Nitrogen Fertilizer Industry Association that the National Development and Reform Commission (NDRC) has been closely monitoring the recent surge in coal prices and the low fulfillment rates of key coal chemical contracts. In response, several high-level meetings have been held to assess the situation and explore effective solutions.
Wang Yanyi, deputy director of the Information Department, revealed that on April 14, the Economic Operation Bureau of the NDRC convened a symposium in Beijing to address coal supply issues in the Jingjintang Power Grid region, Central China, and national fertilizer production. During the meeting, the association highlighted the current challenges, including the low cashing rate of major coal contracts for fertilizer production and a significant rise in coal prices for fertilizers. It was reported that the supply of raw coal for fertilizer companies has been under pressure this year, with prices increasing sharply. Many companies have already reached factory prices exceeding 1,000 yuan per ton, with Zhejiang Longshan Co., Ltd. reaching as high as 1,260 yuan per ton. Meanwhile, the contract fulfillment rate between fertilizer companies and coal mines remains extremely low, with most companies reporting rates between 10% and 30%.
On April 21, the NDRC's Economic Development Bureau held an emergency meeting focusing on coal production and transportation. The China Nitrogen Fertilizer Association presented the ongoing difficulties faced by nitrogen fertilizer producers, mainly due to coal and natural gas shortages, as well as soaring coal prices. These factors have caused production costs to exceed national price caps, while domestic oversupply and high export tariffs have led to widespread losses among enterprises. In response, the association recommended that relevant authorities immediately raise the urea factory price cap, increasing the mid-premium price from 1,500 yuan/ton to 1,700 yuan/ton, and raising the floating margin to 20%. Additionally, it suggested government intervention in coal pricing or financial support for fertilizer companies if price monitoring proves difficult. A coordinated mechanism for urea exports was also proposed to ensure stable production levels.
At the meeting, an official from the NDRC emphasized that the fulfillment rate for coal supply contracts in the fertilizer sector should reach 100%, with no less than 90% in exceptional cases. Fertilizer companies were urged to enhance communication with coal mines and transportation departments. Any entity using railway transport must submit their plans promptly and avoid altering consignee details without authorization. Railway departments were also instructed to develop efficient transportation schedules to ensure adequate coal supply and utilization for fertilizer production.
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