China to Issue Permissions for New Synthetic Ammonia Project
Year:2010 ISSUE:6
Click:329    DateTime:Nov.02,2010
China to Issue Permissions for New Synthetic Ammonia Project   
By Peter Zong   

China Nitrogenous Fertilizer Industry Association (CNFIA) disclosed on March 12th that the drafted permission conditions for the synthetic ammonia will soon be submitted to the Ministry of Industry and Information Technology of China for approval. The drafted permissions, drawn by CFNIA, proposed primarily the minimum capacity for new synthetic ammonia project is 300 000 t/a, meaning that the new project with a capacity less than 300 000 t/a will not be approved.
   In the drafted permissions, CNFIA also set requirements in the aspects of safety, environmental protection, technology and etc. for new ammonia project. As for the existing synthetic ammonia units, CNFIA drafted a requirement on energy consumption. The existing units that can not reach this requirement before deadline will be shut down temporally.
   The increased permission conditions will help the nitrogenous fertilizer sector to control overdue capacity expansion and benefit the existing large scale nitrogenous fertilizer makers.  
   On March 11th, CNFIA held a meeting that the managers of 14 major nitrogenous fertilizer makers including PetroChina Company Limited, Sinopec Corp., China BlueChemical Ltd., Sinofert Holdings Limited, Shanxi Yangmei Fengxi Fertilizer Industry (Group) Co., Ltd., Shandong Luxi Chemical Co., Ltd. and Shandong Hualu Hengsheng Group Co., Ltd. attended to give suggestions on the drafted permissions. CNFIA is now modifying the drafted permissions according to these suggestions and will soon submit the modified permission proposal to China Petroleum and Chemical Industry Association (CPCIA) and the Ministry of Industry and Information Technology. The small and medium nitrogenous fertilizers companies worried about that the permissions may be unfair because it may accept more suggestions from large companies.
   A 300 000 t/a ammonia unit can fully feed a 520 000 t/a urea unit. China's capacity of producing urea is in surplus compared with the local demand, CNFIA said.
   The new urea projects that came on line in 2009 contributed to a combined capacity of 4.3 million t/a, bringing the country's total capacity to 63 million t/a. The new capacity for 2010 will be around 6 million t/a. China now consumes 50 million tons of urea per year itself.
   CNFIA held a cautious attitude on the overcapacity. It thought the overcapacity is not serious but rational control is necessary. Moreover, CNFIA drafted a primary guidance for the structural adjustment on the nitrogenous fertilizer sector to set the controlling number for the total production capacity and encourage large companies to merge and acquire in order to improve the sector's concentration.