LONDON, October 18, 2017 /PRNewswire/ --
Environmental regulations in China will expedite nitrogen plant closures, lower operating rates and cause a tightening demand/supply balance.
We expect to see an increase in costs across the coal based nitrogen producers, lowering urea exports out of China and raising the global urea price floor.
From January 2016 through September 2017, the Chinese central government has implemented four rounds of environmental inspections. 24,700 plants have been levied an aggregate fine of $185 million and over 1,400 people were detained for breaking the environmental protection standards. The wide coverage and strict measures taken during the environmental inspections has instigated broader concerns in the fertilizer industry.
During the 2016-17 environmental inspections, some fertilizer plants were found violating the environmental requirements and forced to shut down, unless they implemented improvements on environmental protection and fulfilled the requisite environmental regulations. The majority of fertilizer plants that were penalised by the Ministry of Environmental Protection (MEP) have been approved to restart production after making necessary improvements in environmental protection.
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