With the constant quotations of urea in various places of 2,000 yuan (t price, the same below), in the second half of the year, urea companies must undergo a “destocking†process. The financial crisis of 2008 has exposed entrepreneurs to the concept of “de-stockingâ€. It refers to: due to large-scale production in the previous period, resulting in a large number of inventories, which seriously exceed the demand, and only digest these inventory, the company can resume normal production process. The generation of inventory requires the following conditions: excess capacity, higher than cost, and relatively stable total demand. The current status of the urea industry is: First, the status quo of excess domestic urea production capacity is still an indisputable fact; second, the price of raw coal for urea production is decreasing, and now the industry’s average total cost should be below 1950 yuan, and the average production company’s profit is more than 100 yuan. The decline in prices was far from the point where production capacity could be suppressed, thus ensuring a high enough operating rate in the industry. Third, Southwest China's natural gas supply was relatively sufficient, providing conditions for the release of production capacity in the southwest; Fourth, the total domestic demand for urea was relatively fixed. After years of development, the capital strength of urea companies has become very strong. The need to realize liquidity as soon as possible has become weak. Enterprises through the strong financial strength and price alliances between companies to play with the market, the price decline is slow, short-term The illusion that the market price is firm has been caused by this kind of illusion, and the consequence of this illusion is that the operating rate of the company has remained high and the problem of oversupply of the market has accumulated continuously. In the end, it may evolve into a very serious destocking process. At this time, the monetary requirements of commercialization are realized, and the bottom line of the cost of production companies will be completely broken down, just as we saw in the steel industry, and it is the loss of the entire industry. However, the increase in industry strength does not mean that we can fundamentally change the economic laws! The total demand for urea is relatively stable, and the supply is unstable. When the total production capacity is large enough, when the price is higher than the cost, the operating rate of the enterprise will increase and the supply of commodities will increase. When the price is lower than the cost, the operating rate of the enterprise will decline, and the supply of commodities will decrease. It will decrease. When the company is well-capitalized, it can mass-produce and store a large amount of self-reserve to support the market; under bullish expectations, when the business is hoarding, etc., the production company's product price is higher than the cost, and the enterprise mass production, and the total demand is relatively fixed. In the future, it will cause serious oversupply, resulting in the need for destocking. The money that has already been commoditized will require monetization. By this time, companies will sell at all costs, and the rate of start-ups of enterprises will also drop substantially, thus restoring the balance between new supply and demand. In contrast to the urea industry, although there are two major illusions to support the market: exports and industrial demand in the fall, but in the absence of any change in the above facts, companies should try to retain as much monetary assets as possible to minimize inventory, not in At present, under the illusion of high prices, we hope to realize the commercialization of currency.
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