For the fertilizer industry in the second half of 2008, cost pressures remain high, prices will remain high, and sales will face difficulties. For compound fertilizer companies, opportunities and challenges will coexist.
First, prices are still shifting high operating cost pressures downstream. It is expected that fertilizer prices will remain high in the second half of 2008: 1Comparatively, the cost of fertilizers will be greater in the second half of the year than in the first half of the year; Under the product, so the first half of the compound fertilizer prices did not really convey the pressure of upstream costs. With the continuous rise in recent times, the current adjustment of the prices of various raw materials for compound fertilizers is basically completed, and the high-level operation is now a foregone conclusion. In the second half of the year, the compound fertilizers will face higher costs than in the first half of the year. 2 In the second half of the year, the hot-selling varieties are mainly phosphorus compound fertilizers. Compared with the price of phosphate fertilizers, the price advantage of compound fertilizers is still relatively obvious. Although the overall consumption of compound fertilizer will decline this year as a whole, compound fertilizer can still occupy part of the original phosphate fertilizer price advantage, and the demand will increase relatively, supporting the high price. 3 At present, many small-scale fertilizer companies are still in production stoppage due to cost pressure, and some companies with stronger capabilities have also adopted production cuts or sales, and supply has been relatively reduced, supporting high prices. In addition, through the investigation of the author, under the pressure of production capacity and sales, most of the compound fertilizer companies alone underwent the pressure of some cost increases. However, as the cost continues to rise in the second half of the year, companies have reached the edge of not making money, according to the company. With the principle of profit, cost pressures naturally shift downward. At present, the market has begun to show a shift in cost pressures to the downstream, and this trend will increase significantly in the second half of the year. ?
Second, the farmers have limited capacity to face difficult sales of fertilizers Fertilizer prices are related to the affordability of farmers, and affordability is directly linked to food prices. Although China's grain prices have been steadily increasing year after year, farmers' ability to withstand the price of fertilizer is far behind the current price increase and the increase in fertilizer prices. According to statistics, 2007 was a year in which China’s grain prices continued to rise. The combined production prices of wheat, rice, corn, and soybeans were up about 12% from the previous year, and the retail price of grain rose from the previous year. About 6.5%, this increase is far less than the rise in chemical fertilizers. Although the state has repeatedly raised subsidies for grain farmers, due to the excessively high price increase and excessive frequency of chemical fertilizers, farmers' consumption of chemical fertilizers has fallen sharply, and compound fertilizer sales are facing difficulties. It is expected that under the tight export policy this year, there will be no major breakthrough in the export of compound fertilizers, and most of the sources of goods will still have to seize the domestic market and the sales pressure will be greater. As mentioned earlier, in the second half of the year, the cost pressure for compound fertilizers will continue to shift downstream. Many dealers are under pressure to increase product prices on the one hand, and on the other hand are under pressure to persuade farmers to accept high-priced compound fertilizers. Under such pressure, part of the distribution is under pressure. Businessmen are reluctant to operate compound fertilizers, and the sales of compound fertilizers are in danger of getting out of joints. ?
III. Enterprises are facing transformational opportunities Compound fertilizers return to service nature The long-term development model of “200 million tons of production capacity, 50 million tons of production and more than 4,000 enterprises” has obviously not been suitable for the development of the compound fertilizer industry, but under the influence of various factors. This structure has existed for many years. The structural adjustment of this industry does not depend on a certain company or some enterprises. It needs the strength of the entire industry. Unlike previous years, this year’s soaring cost pressures have caused large companies to become more dominant in this “bad” environment this year. Many small companies have stopped production, restricted production or even closed down. The gap between enterprises has started to increase. The restructuring of the entire industry is beneficial. Obviously, we cannot rely solely on this year's delusion of breaking the compound fertilizer's weird “200 million tons of production capacity, 50 million tons of production, and more than 4,000 companies” development model, but this year is indeed a good opportunity for the transformation of advantageous enterprises. ?
At present, the most popular in the compound fertilizer industry is the development of slow-release/controlled-release fertilizers. This slow-release/controlled-release fertilizer, which was defined as “one of the fertilizer development directions of the 21st century” in the “Eleventh Five-Year Plan”, finally arrived in 2008. Came "spring." The company's new projects that do not have a sustained/controlled release fertilizer production line, and those that already have a sustained release/controlled release fertilizer production line have added new projects. Recently, Hanfeng Group has cooperated with local companies in Shanxi, Shandong, and cooperated with local sulfur sulfur coated urea production lines. Let us clearly feel that slow-release/controlled-release fertilizer has been recognized by the fertilizer industry. In fact, from another point of view, the “heating up” of the sustained-release/controlled-release fertilizer project is also a manifestation of the nature of the return of the compound fertilizer industry. Slow/controlled release fertilizers do not only represent high-tech, environmental protection, but also enable farmers to Save fertilizer, save labor, and directly serve farmers. In fact, from the perspective of the production and development of the compound fertilizer industry, the biggest difference between compound fertilizers and other industries is that single fertilizers concentrate on products, while compound fertilizers also sell services while selling fertilizers, and services become mixed. The “selling point” and “winning point” in the fertilizer industry, but this essence was neglected at the beginning of the industry development. In recent years, many companies in the compound fertilizer industry have also realized this, and a series of agrochemical services such as “send technology to the countryside” and pilot villages have been launched one after another. However, from a national perspective, the scale should continue. The expansion and progress will continue to accelerate.

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