The rise of nanometers

The global phosphate fertilizer and potash fertilizer markets are experiencing sudden changes.

Although North America blocked the three major mining groups from acquiring Maple Leaf Potash Company, the upstream supply of global potash fertilizer raw materials has been firmly controlled by the three major mining groups.

Similarly, the upstream raw materials for phosphate fertilizers are also under control.

On January 28, only two days have passed since the Lunar New Year.

The surging phosphorus and potash fertilizer market has seen huge differentiation.

The Huaguo Fertilizer Consortium, formed by three major mining groups, sells phosphate, potassium chloride, and potassium sulfate at low prices to franchised companies through an internal quota plan, while for non-franchised fertilizer companies, it increases the raw materials of potassium salt and phosphate. price.

As a result, international fertilizer companies have suffered greatly. The prices of finished fertilizers from Chinese fertilizer companies have remained at historically low levels, resulting in low prices for finished fertilizers in the international market.

In this situation, if it were before, because the prices of fertilizer raw materials were also sluggish, everyone could still make a profit, but now the prices of potash and phosphate have skyrocketed, soaring by more than 240 to 280% in just over a week, which is simply catastrophic. s consequence.

The price of raw materials has risen, but the price of finished fertilizers has been sluggish. The huge price scissor gap has caused major international fertilizer companies to complain. They can only activate raw materials in stock to cope with the situation, but raw materials in stock can last for up to three to six months.

As a last resort, they can only increase the mining of potash and phosphate in their own country and other regions, but expanding production capacity is not just a matter of words.

Local mining procedures, mining area exploration, infrastructure, mining equipment, staffing, etc., once it is set up, it will take less than a year and a half to start mining.

Based on the efficiency of foreign affairs, even if it is an emergency, it will take more than a year.

And in doing so, you will face huge risks. Now the production of phosphate and potassium salt has become profitable due to the high international prices.

However, a number of international mining companies know very well that once their mining areas are built, huge investments are made, and large-scale mass production begins, prices will probably plummet across the board.

The production cost itself is very high, 3 to 4 times higher than that of the three major mining groups. The three major mining groups can make money at low prices, but they will be ruined as soon as the prices are low.

After being tossed back and forth several times, the skin would peel off even if he died.

The four major grain groups ABCD and their industries are comprehensive industrial chains, similar to the industrial chain of the Suiren Group.

Their industrial chain covers farmland, seeds, fertilizers, pesticides, agricultural machinery, processing, energy, transportation, warehousing, agricultural product futures and insurance. It basically covers both upstream and downstream.

This is also the reason why ABCD is difficult to hit hard.

But is this industry chain really impeccable?

If the era before the 20th century was farmland agriculture, then the era after the 20th century was fertilizer agriculture.

In the past, farming relied on good land and climate environment, while modern agriculture relied on chemical fertilizers, pesticides and mechanization.

Among them, chemical fertilizers are the foundation of modern agriculture. Even the nutrient base of soilless cultivation requires the support of nitrogen, phosphorus, potassium and trace elements.

Without the support of chemical fertilizers, global agricultural production may drop by about 50%. This is an extremely important part of modern agriculture.

Nitrogen fertilizer can be refined from nitrogen in the atmosphere, but potash and phosphate fertilizers need to be refined from minerals. Ordinary seawater potassium refining technology has high potassium fertilizer production costs, which is not enough to compete with land mineral refining, let alone with the three major mining groups. competition.

Although ABCD has deep pockets, it is extremely difficult to stabilize its potassium and phosphate fertilizers because the pricing power of minerals and finished fertilizers is controlled by the three major mining groups.

The three major mining groups also used ABCD's three tactics to deliberately increase the price of raw materials and suppress the price of finished fertilizers, artificially creating losses.

Nowadays, their cooperatively controlled fertilizer manufacturers lose dozens of yuan per ton of potassium, phosphate and compound fertilizers produced, and some companies even lose hundreds of yuan per ton.

The entire group relies on constant blood transfusions to survive. Basically, the more production the more losses occur, and the products are not competitive. In addition to ABCD's own purchases, other farms and farmers in need purchase products from the Huaguo Fertilizer Consortium.

Even Australian farmers and agricultural companies that have close relations with ABCD have to purchase chemical fertilizers from China. After all, they use huge amounts of chemical fertilizers. If the cost of chemical fertilizers is too high, it will further weaken the competitiveness of their agricultural products.

For example, for Australian dairy companies, if the price of chemical fertilizers increases, the cost of pasture and feed will also rise, which will in turn increase the cost of milk.

It was nothing before, but in the past two years, international dairy product prices have also been sluggish. They can only reluctantly fight against the Agricultural Reclamation Alliance. Once the cost of dairy products rises, it may lead to the collapse of Meng Yang and Yili that they support.

In the industrial chain of agricultural products, chemical fertilizers are the core link upstream. Once prices fluctuate, it will affect the entire industry.

America.

Cargill's headquarters building in New York.

The presidents of the four major ABCD grain groups once again appeared here low-key and held a secret meeting.

The president of Adami Company, Yaris, an old white man with a hooked nose, knocked on the table: "The swine fever offensive is not obvious, and the Suiren department has begun to counterattack."

David Solomon, the president of Bunge on the left, had a fierce look in his narrow eyes: "Yaris, we must ensure the stability and safety of the fertilizer industry, otherwise the consequences will be very serious if this continues."

As the host, Cargill President William A. Cakir, a middle-aged Scottish man with dark red hair and emerald green pupils, is also worried. Although Cargill is the most powerful company in ABCD and the only company that is not listed, The price fluctuation of chemical fertilizers still has a considerable impact on their company.

Roger Brown, the president of Louis Dreyfus, is a little old Gallic man with age spots on his face. The recent counterattack by the Suiren Group has indeed made him feel a huge increase in pressure.

Roger's old voice sounded in the conference room: "The sudden reduction in production of the Moroccan Phosphate Company is the result of the three major mining companies operating behind it. Although Gaul has great influence in northwest Africa, the Moroccan Phosphate Company is basically out of control. ”

"Damn it, can't we restrict these guys from doing whatever they want?" Yaris was furious.

No wonder they are so angry. Suiren's current behavior is to tear apart ABCD's industrial chain and take down the fertilizer industry in their industrial chain.

Once the fertilizer industry is captured, there will be a big gap in the global industrial chain that they have worked hard to lay out for decades.

But at the beginning, they did not expect that the Suiren Department would use its dominance in the ore market to control the global prices of phosphate and potash fertilizers, causing ABCD's fertilizer companies to enter a state of loss during production.

William thought for a while and said: "How about expanding mineral mining in other areas?"

The old Roger shook his head: "No, I contacted several mining companies, and they all said they did not want to develop phosphate mines and potash mines because the risks are too great."

Yaris and Solomon also frowned. Except for the cooperative companies of the three major mining groups, other companies wanted to mine minerals without going to the dock. I'm afraid they thought they had too much money.

Even the Maple Leaf Potash Company, which entered bankruptcy and reorganization, is in trouble with no one to take over.

After all, capitalists are not philanthropists. North America has forcibly prevented the three major mining groups from acquiring the Maple Leaf Potash Company. The consequence is that this company will no longer be able to get ahead.