Dear shareholders,
The Company has consistently adhered to a philosophy of green and sustainable development. Its methanol plant has been awarded the honorary title of “Energy Efficiency Leader” by the China Petroleum and Chemical Industry Federation for 13 consecutive years, and our synthetic ammonia plant has been awarded the honorary title of “Water Efficiency Leader” by the China Nitrogen Fertiliser Industry Association for 5 consecutive years. It has successfully passed the “Industry Stewardship Champion” certification by the International Fertilizer Industry Association.
Review of the first half of the year
During the reporting period, the Company continuously strengthened production and operation control, constantly improved the rationality and economy of equipment maintenance cycles, and released a 5-year rolling plan for equipment maintenance. The major overhauls of the Fudao Phase I urea unit, Fudao Phase II urea unit, and Hainan Phase II methanol unit were all completed successfully ahead of schedule, laying a solid foundation for subsequent stable operations. In the first half of the year, the Company produced 973,000 tonnes of urea, 707,000 tonnes of methanol, 445,000 tonnes of phosphate fertilisers and compound fertilisers, and 97,000 tonnes of acrylonitrile series products. Except for urea, the production of other products increased year-on-year.
In terms of marketing, facing the complex and ever-changing market situation, the Company has further strengthened market analysis and priced scientifically and precisely. We explored deeply the market competitiveness and price elasticity of products, and promoted the development of the competitive sales business of fertilisers and methanol. We strengthened direct sales through e-commerce, with e-commerce direct sales volume increasing by 54% year-on-year. In the first half of the year, the Company sold 1.003 million tonnes of urea, 668,000 tonnes of methanol, 401,000 tonnes of phosphate fertilisers and compound fertilisers, and 88,000 tonnes of acrylonitrile series products.
In the first half of the year, the Company strengthened environmental compliance management and made every effort to promote the upgrading of facilities. The Company's online pollutant emission data has met the standard hundred-percent for 2 consecutive years, and the number of environmental pollution incidents has remained at “0”. Our energy efficiency indicators continued to maintain a leading position in the industry, and the energy conservation and emission reduction indicators performed well overall. In the first half of the year, the Company's overall production safety situation was stable, and no ?production safety accidents occurred.
Outlook for the second half of 2024
Looking ahead to the second half of the year, the overall supply increase of urea is expected to exceed the demand increase. Domestic urea prices are expected to be weak in the third quarter, but will improve later with the preparation of fertilisers for winter wheat. The overall supply of phosphate fertilisers is sufficient, while with the combined effects of international procurement, domestic autumn wheat demand, and the demand release of winter fertiliser storage, the overall demand is expected to be relatively strong with prices remaining cautiously optimistic. Methanol supply is relatively abundant, while imports are expected to resume growth, downstream demand is expected to grow, and the cost side will provide price support. It is expected that the supply and demand situation will change frequently, with the market mainly exhibiting wide fluctuations. Both supply and demand for acrylonitrile are expected to grow, but the increase in supply will be more prominent. The market may continue to experience an oversupply, and spot prices are expected to remain weak.
In the second half of the year, the Company will strive to ensure the safe and stable operation of production facilities, and enhance risk mitigation capabilities. We will continuously optimise resource allocation, leverage locational advantages, and enhance product competitiveness; further explore the potential for marketing efficiency improvement; and improve refined management standards and establish a cost control indicator system. We will strengthen our brand building, and strive to create a benchmark base for green agriculture brands; emphasise digitalisation, intelligence, and green and low-carbon initiatives, and promote equipment upgrades; and conduct research on the development planning of green strategic emerging industries.
Hou Xiaofeng
Chairman、Executive Director、Chief Executive Officer (CEO), President
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