Just after the National Day holiday, as reporters visited Shandong to investigate the current state of fertilizer production, executives from Shandong Ruixing Chemical Group and Shandong Heze Tailong Chemical Co., Ltd. expressed deep concerns. They both emphasized that the impact of recent typhoons on their operations had been extremely severe.
According to company representatives, a series of typhoons—Tailee, Kanu, Davi, and Dragon King—had caused prolonged rainfall across Shandong and surrounding regions for nearly a month. This led to delayed autumn harvests and missed sowing seasons, which in turn significantly reduced farmers’ demand for fertilizers. As a result, the fertilizer market in Shandong has been experiencing a sharp downturn, often referred to as a "cold flu."
The continuous decline in market activity has placed many fertilizer manufacturers in Shandong in their toughest situation in the past two years. With weak demand, stalled sales, and cash flow issues, what should have been the peak season for fertilizer use has turned into an off-season. Many companies are now facing an early winter, struggling to keep operations running smoothly.
In late August, the same typhoons hit the southeastern coastal areas before moving inland, causing persistent rain in Shandong, Henan, Anhui, and northern Jiangsu. By September, Shandong recorded an average rainfall of 180 mm, the highest since records began in 1916. This excessive rainfall damaged crops, leading to lower yields or even total losses. The heavy rains also weakened farmers' purchasing power, further reducing their need for fertilizers.
Shandong is home to numerous small nitrogen fertilizer producers, many of whom export urea to provinces like Jiangsu and Anhui. Due to the typhoon impact, crop yields in these regions have dropped, leading to lower farmer incomes and less fertilizer usage. Although rainfall has decreased after the National Day, wet fields have made mechanical harvesting difficult, forcing labor-intensive methods instead. Additionally, some crops were not planted on time, further affecting fertilizer demand.
On one hand, farmers are using far less fertilizer than usual; on the other, fertilizer manufacturers are still producing at full capacity. To maintain cash flow, many companies have been forced to sell at prices close to cost. This has led to declining confidence among sellers, further driving down fertilizer prices in Shandong and neighboring areas.
A sales manager from a Shandong-based fertilizer company told reporters that urea prices had fallen from around 1,700 yuan per ton to over 1,500 yuan, below the national price limit. Companies are essentially selling at a loss. According to the manager, the average monthly drop in urea prices was about 150 yuan per ton, with a monthly production of 33,000 tons. This resulted in a revenue loss of nearly 5 million yuan for the company. Meanwhile, ammonium bicarbonate prices have dropped to 440 yuan per ton, down by 50 to 60 yuan.
The biggest challenge for fertilizer producers remains the lack of working capital. High raw material costs, especially for coal that must be paid for upfront, combined with falling fertilizer prices, have pushed some small-scale companies in Shandong to the brink of closure.
Moreover, the ongoing rain has also affected winter fertilizer storage. In some areas, the harvest hasn’t started yet, and certain crops may not even be planted. Fertilizer producers and distributors are uncertain about future price trends, how long the current low prices will last, and whether farmers will be able to afford fertilizers. This uncertainty makes it difficult to agree on winter storage prices. If this issue isn’t resolved, production planning for the next few months will be severely impacted.
While the typhoon turmoil has subsided, the challenges faced by Shandong’s fertilizer industry remain unresolved, leaving many operators in a state of anxiety and uncertainty.
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