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Nitrogen fertilizer is an important material for increasing grain production. To ensure China's food security, it is necessary to guarantee a stable supply of nitrogen fertilizer. Spring is a critical period for agricultural production, and ensuring the supply of nitrogen fertilizer in spring is of Paramount importance. This information was released at the 2025 Spring Nitrogen Fertilizer Market Situation Analysis Conference held in Hangzhou on March 6th.

Gu Zongqin, the president of the China Nitrogen Fertilizer Industry Association, pointed out that in 2024, the total national grain output exceeded 1.4 trillion jin for the first time, remaining stable at over 1.3 trillion jin for ten consecutive years. The bumper grain harvest in 2024 is largely attributed to nitrogen fertilizers. All nitrogen fertilizer production and circulation enterprises have overcome difficulties, made efforts to do a good job in nitrogen fertilizer production and sales, achieved sufficient domestic supply of nitrogen fertilizers, with prices dropping significantly year-on-year, and exceeded the nitrogen fertilizer supply guarantee task.

When it comes to the national nitrogen fertilizer production and market operation in 2024, Gu Zongqin analyzed that in 2024, China's nitrogen fertilizer production and market will present five major characteristics, namely, increased output, abundant market supply, decreased export volume, falling coal prices, and a significant drop in nitrogen fertilizer prices.

The first is that the output has increased significantly. According to the quick report of the China Nitrogen Fertilizer Industry Association, the national output of synthetic ammonia in 2024 was 73.077 million tons, representing a year-on-year growth of 8.1%. The output of nitrogen fertilizer was 49.258 million tons (in pure terms), increasing by 8.8% year-on-year. Urea output was 67.237 million tons, up 6.9% year-on-year.

Second, the export of urea has declined significantly. According to customs statistics, in 2024, China's nitrogen fertilizer exports reached 5.54 million tons of pure nitrogen, a year-on-year decrease of 16.7%, while imports were 207,000 tons of pure nitrogen, a year-on-year increase of 3.9%. In 2024, China's urea exports reached 263,000 tons in physical form, a year-on-year decrease of 93.8%, while imports were 4,000 tons in physical form, a year-on-year increase of 17.1%.

Third, consumption has grown significantly. According to the estimation of the China Nitrogen Fertilizer Industry Association, the apparent consumption of nitrogen fertilizer in China will reach 43.925 million tons (in pure terms) in 2024, representing a year-on-year growth of 13.2%. The apparent consumption of urea was 66.982 million tons (physical quantity), increasing by 14.2% year-on-year.

Based on the economic operation of the downstream industries, the reasons for the changes in demand are initially determined to be as follows: First, the agricultural department has launched an action to increase the yield per unit area of major crops on a large scale, vigorously promoting high-yield fertilizer technologies such as close planting and water and fertilizer integration, resulting in an increase in nitrogen fertilizer application per unit area. Second, the unit nutrient price of nitrogen fertilizer is significantly lower than that of other nutrients (by 10 to 20 yuan). Some compound fertilizer enterprises have increased the amount of nitrogen in the fertilizer formula to cut costs (the current nitrogen content is mostly between 20% and 28%, while in the past it was generally between 15% and 18%). Third, the reducing agent used for denitrification in thermal power plants is changed from ammonia to urea. The fourth factor is the influence of the international market, driven by the export of some nitrogen fertilizers and compound fertilizers.

It is estimated that in 2024, the consumption of urea in the non-agricultural sector will be approximately 21 million tons, and that in agriculture will be about 42 million tons. The annual consumption of nitrogen fertilizers was 38.7 million tons of pure nitrogen, including 28.2 million tons in agriculture and 10.5 million tons in the non-agricultural sector.

Fourth, the price of coal decreased year-on-year, while the price of natural gas rose slightly overall. According to statistics from the China Nitrogen Fertilizer Industry Association, in 2024, the average arrival price of anthracite lump coal was 1,165 yuan per ton, a decrease of 280 yuan per ton compared with the previous year, representing a decline of 19.4%. The average arrival price of bituminous coal was 1,000 yuan per ton, a decrease of 73 yuan per ton compared with the same period last year, representing a decline of 6.8%. The average arrival price of natural gas was 2.137 yuan per cubic meter, up 4.5% year-on-year.

The fifth point is that the price of nitrogen fertilizer has dropped significantly. According to statistics from the China Nitrogen Fertilizer Industry Association, the average ex-factory price of urea across the country from January to December was 2,066 yuan per ton, a year-on-year decrease of 14.6%.

Gu Zongqin said that during this year's domestic spring ploughing period, the supply of nitrogen fertilizer resources is sufficient. The foundation for ensuring the supply of nitrogen fertilizer throughout the year is significantly better than last year. Coupled with the decline in raw material prices, the price of urea during the spring ploughing period will be lower than that of the same period last year. Although the price has slightly rebounded recently, from the perspective of basic demand, there will not be a significant upward trend in urea prices this year.