China Business News – Compound Fertilizer Companies Accelerate Transformation and Upgrading

Overcapacity in the compound fertilizer sector is severe, particularly in the conventional fertilizer segment. This has not only intensified cutthroat price competition but also impeded the industry’s healthy development. Guided by supply-side reform policies, outdated production capacity has been phased out, accelerating industry consolidation.

On June 5–6, 2017, the China Compound Fertilizer Industry Innovation and Development Summit Forum and the Second Annual Meeting of the National Compound Fertilizer Engineering Center were held in Linshu, Shandong. The conference emphasized that future development of the compound fertilizer industry should prioritize enhancing fertilizer use efficiency and reducing environmental burdens, with high efficiency, environmental friendliness, energy conservation, and functionalization emerging as key trends.

Analyst Xu Shuxian noted that in recent years, companies have accelerated R&D on new products, with many firms successively launching innovative offerings. For example, Shenzhen Batian introduced its “Golden—Water-Soluble Organic Carbon” series of compound fertilizers in September 2016. According to reports, this product line incorporates active water-soluble organic matter into either high‑tower or conventional production processes, along with organic chelated forms of micronutrients such as magnesium, zinc, and boron. Moreover, the granules are coated with a bioactive microbial film, making it a novel, multifunctional, high‑efficiency fertilizer. It boasts multiple technological advantages: excellent fertilizer efficacy, balanced nutrient content, superior quality; an efficient carbon source that helps maintain product quality and enhances crop taste and marketability; nano‑organic carbon that promotes rapid, robust growth; a bio‑coating that mitigates continuous cropping issues; synergistic action among multiple elements to ensure high yields; and improved root absorption and increased nutrient use efficiency. Another example is Hubei Xiangyun, which launched its “Healthy Cloud” product series at the end of 2016. This line reportedly contains over 5% organic matter, more than 90% water‑soluble phosphorus, and exceeds 20 million viable microorganisms per gram. It offers comprehensive nutrition with high absorption rates, excellent water solubility for convenient application, and the ability to improve soil fertility and enhance crop quality.

Price increases for high-value-added products boost revenues.

In the compound fertilizer market, high-nitrogen fertilizers are now stepping off the stage as summer draws to a close, while high-phosphorus fertilizers continue to attract growing attention in the autumn.

Analyst Li Jinmei noted that, on the production side, NPK fertilizers are trading at mid-to-high price levels, with producers largely adopting a wait-and-see approach. While there is strong interest in supplying fertilizer for wheat, actual production remains in the preparatory phase. Meanwhile, pricing and policy concerns among intermediate traders are not expected to become clear until July.

In terms of autumn sowing and tillage, the demand for fertilizers has shifted from high‑nitrogen maize, peanut, and rice cropping systems—typically rotated at three harvests every two years, two harvests per year, or three harvests per year—to winter wheat–growing regions such as the East China, Central China, and North China plains.

In terms of fertilizer types, given wheat’s relatively long growth cycle, the role and popularity of slow- and controlled-release fertilizers are expected to increase significantly. Moreover, amid declining arable land quality in China, the government has been actively promoting the use of organic fertilizers in agricultural production; consequently, organic fertilizers, organic–inorganic blended fertilizers, microbial fertilizers, and other emerging fertilizer categories are likely to see sustained growth going forward.

On the fertilizer pricing front, trading activity remained subdued throughout the summer season. However, with manufacturers aiming to maintain prices and support downstream sales, official list prices for compound fertilizers were left unchanged. Instead, they adopted a range of flexible promotional measures, such as cash‑discount incentives, performance‑based bonuses, and subsidies. According to Li Jinmei, given that both the domestic and export markets for compound fertilizers are signaling weakening demand, she expects market prices to continue declining during the traditionally active July–August period for autumn‑season fertilizer trading.