Currently, nitrate-based fertilizers account for only 4.1% of the nitrogen fertilizers applied in China—far lower than the 10% to 30% share seen in developed countries such as those in Europe and the U.S. Why is the market share of nitrate-based fertilizers, which are highly favored by Chinese consumers, so low? Where exactly lie the bottlenecks? And how can we break through these barriers during the 14th Five-Year Plan period? These are critical questions that must be addressed and thoroughly explored throughout the research, production, promotion, and application of nitrate-based fertilizers. At the 2021 High-Quality Nitrate Fertilizer Re-Action Conference, launched on March 30 in Beijing, Li Tengfei, Executive Deputy General Manager of Shanxi Huaxin Industrial Group, explained to the media the company’s original intention behind its continued participation in the high-quality nitrate fertilizer initiative.

Agricultural Inputs Herald: What considerations underlie Huaxin Industrial Group’s continued participation in and support of the High-Quality Nitrogen Fertilizer Initiative?

Li Tengfei: Since 2018, Huaxin Industrial Group has been participating in the High-Quality Development Initiative for Nitrogen-Based Fertilizers launched by the China National Chemical Industry News Agency. This year marks the third anniversary of our involvement. Over the past three years, Huaxin Group has personally experienced the benefits and positive energy brought about by its participation in this initiative. Statistics show that by joining the High-Quality Development Initiative for Nitrogen-Based Fertilizers, Huaxin has effectively boosted sales of its nitrogen-based fertilizer products, achieving a remarkable growth against the trend in an increasingly complex and volatile market environment! At the same time, we’ve also observed that while the nitrogen-based fertilizer industry is rapidly developing, there’s currently a mismatch between existing production capacity and actual consumption levels, indicating that the market still holds enormous untapped potential. According to available data, China’s current nitrogen-based fertilizer production capacity stands at around 22 million tons, yet the market share of these products remains below 2%. So where exactly lies the bottleneck, and how can we break through it? It was precisely based on this realization that, after multiple rounds of communication with the “Nongzi Dao Bao” publication of the China National Chemical Industry News Agency, both parties ultimately reached a consensus. In 2021, Huaxin Industrial Group once again joined forces with the “Nongzi Dao Bao” publication of the China National Chemical Industry News Agency, together with other industry peers, to launch a new initiative themed “Fertile Soil for All, Healthy Nation—The 2021 High-Quality Re-Action for Nitrogen-Based Fertilizers.” The goal of this initiative is to work closely with leading enterprises in the industry, under the guidance of the National Agricultural Technology Extension Center of the Ministry of Agriculture and Rural Affairs, the China Nitrogen Fertilizer Industry Association, the China Phosphate and Compound Fertilizer Industry Association, the National Fertilizer Quality Supervision and Inspection Center (Beijing), and the China Plant Nutrition and Fertilizer Association, to gain a clear understanding of the industry’s current status, identify the key practical challenges still hindering the development of nitrogen-based fertilizers, explore viable solutions, set industry benchmarks, and fully promote the high-quality development of the nitrogen-based fertilizer sector.

Agricultural Input News: What is the current status of the nitrate fertilizer industry?

Li Tengfei: First, from a national strategic perspective, integrated water-fertilizer technology—aligned with water-saving, fertilizer-efficient, and high-efficiency agriculture—is attracting increasing attention. Nitrogen-based fertilizers, which boast excellent water solubility, rapid effectiveness, high utilization rates, water conservation, environmental friendliness, and the ability to enhance crop quality, are poised to become the new favorite. Nitrogen-based fertilizers play a crucial role in addressing soil drought, water scarcity, and promoting the development of water-saving agriculture. They represent a premium agricultural input that is fully consistent with sustainable development, resource-conserving practices, and environmentally friendly farming.

Second, from the perspective of market demand, nitro-based fertilizers hold tremendous potential. According to available data, among China’s 1.8 billion mu of arable land, about 700 million mu are suitable for the use of nitro-based fertilizers. If all of this land were to adopt such fertilizers, annual demand would exceed 30 million tons. On the supply side, China’s current production capacity for nitro-based fertilizers stands at around 22 million tons. Moreover, there are relatively few compound fertilizer companies that possess ammonium nitrate resources, meaning the actual supply entering the market is significantly lower than the potential capacity, leaving a substantial gap. It is understood that currently, nitro-based fertilizers account for only a modest 4.1% of the nitrogen fertilizers applied in China, whereas in developed countries such as those in Europe and the U.S., this proportion has already reached over 30%. In Russia, the share is 39.7%; in Germany, it’s 27.5%; in Brazil, 16.1%; and in the U.S., 12.6%. From these figures, it’s clear that the domestic market for nitro-based fertilizers has enormous untapped potential, and its market prospects are widely viewed favorably.

Third, judging from the current situation, nitrate-based fertilizers—being a key segment within the vast fertilizer market—are playing an increasingly important role in today’s fertilizer landscape. Their stable properties, high nutrient compatibility, excellent fertilizer efficiency, and good water solubility perfectly align with the needs of agricultural development in the new era. Moreover, these fertilizers play a critically important role in addressing issues such as soil drought, water scarcity, and the development of water-efficient agriculture. We also know that truly meaningful nitrate-based compound fertilizers are primarily produced using ammonium nitrate as the main raw material. Yet, among the thousands of chemical enterprises currently operating in China, relatively few are capable of independently producing nitrate-based fertilizers by fully leveraging their own resources. Particularly when we compare domestically and internationally, we find that nitrate-based fertilizers hold a remarkably significant share of usage in countries like those in Europe and the U.S. It is safe to say that the future market prospects for nitrate-based fertilizers in China will undoubtedly be a vast, untapped blue ocean.

Agricultural Input News: What bottlenecks need to be overcome for the high-quality development of nitrate fertilizers?

Li Tengfei: On the one hand, during the current promotion of nitro-based fertilizers, the market still harbors quite a few misconceptions. For example, there are widespread claims that nitro-based fertilizers are suitable only for cash crops and not appropriate for use on field crops. Such misinformation is bound to hinder the subsequent development of market promotion efforts. Therefore, it’s crucial for us to promptly identify these misconceptions and speak out forcefully to collectively break through these incorrect perceptions. This is precisely why, in the second phase of our nitro-based fertilizer industry initiative, we’ve chosen to dedicate nearly a year to organizing the “Technical Innovation Lecture Series.” In fact, this lecture series will be the cornerstone of our work this year. Not only will we involve enterprises themselves as participants, but we’ll also extend this educational platform to a broad audience—including distributors, farmers, and even the entire fertilizer industry—doing our utmost to ensure that the correct understanding and practical application of nitro-based fertilizers take root effectively.

On the other hand, the state’s stringent control over hazardous chemicals has to some extent hindered the development of nitro-based fertilizers. Since nitro-based fertilizers primarily use ammonium nitrate as their main raw material, their finished products have been widely questioned—often before their safety has been scientifically verified. This is particularly evident in the restrictions imposed on production and storage, with bulk logistics—especially those relying on sea and rail transport—being subjected to layer upon layer of bureaucratic hurdles. In some cases, even under urgent notices, transportation authorities have resorted to blanket bans, severely impeding the steady development of nitro-based fertilizers. What we need to do is continuously enhance the explosion-proof performance of our products, jointly demonstrate their safety, articulate the industry’s demands, and actively engage with relevant government departments to seek constructive dialogue and effectively address the current challenges and pain points in the shipment of nitro-based fertilizers.

Agricultural Inputs Herald: What advantages does Huaxin Group have in developing nitro-based products?

Li Tengfei: Returning to the product itself, Huaxin Group is the nation’s first modern, circular, and environmentally friendly enterprise to use its own coke oven gas to produce nitro-based compound fertilizers, giving it a natural advantage at the raw-material end. As a manufacturer whose entire product line consists of nitro-based fertilizers—such as ammonium nitrate calcium and calcium magnesium nitrate, which are produced locally—our nitro-based new fertilizers have consistently enjoyed great popularity among consumers. This is precisely because nitrates readily combine with metal cations; when combined with trace elements like calcium, magnesium, zinc, copper, iron, and molybdenum, they don’t easily form precipitates, thereby ensuring that crops can absorb nutrients more comprehensively. In terms of physical properties, nitrate-based metal products outperform sulfate-based metal products, representing a significant breakthrough in fertilizer performance. To capitalize on this advantage, our nitro-fertilizer companies need to accelerate breakthroughs in the formulation processes that match nitrates with these metal cations, continue to focus on optimizing product structures, and keep pushing forward with continuous upgrades.