Urea Market Will Usher In Rising

- Jun 15, 2019-

The urea that always loves to "do things" has been tossing for a long time, and finally "up". For the time being, it is only a partial phenomenon. In the context of basically no topic can be speculated, it is not easy to raise prices; but for the “old driver” in the urea industry, the increase of 10-20 yuan/ton does not cause an uproar. Recently, Shandong and surrounding areas Urea price rose 10-20 yuan / ton, the reason is that some enterprises urea plant temporary conversion liquid ammonia, the company's low-cost advance receipt orders are sufficient, price increases to stimulate shipments, but this has not changed the downstream dealers The mode of operation with the pick.


In addition to Shandong and Hebei, which are of concern to everyone, the urea manufacturers in other regions have not “followed the trend”. The prices are stable or even fall. For example, the urea price in Hubei market has dropped, and the industrial urea ex-factory price is only 1,900 yuan/ton. The mainstream factory price of urea in the southwest has also dropped by about 30-50 yuan/ton to about 1850-1910 yuan/ton. It is enough to see the urea market is not as optimistic as the imagination, the traders are still on the market, and clearly understand that supply and demand changes dominate the trend of the urea market.


Urea enterprises started to work at a high level, and the supply of goods was excessive. Some urea enterprises that have been discontinued for a long time will not be described for the time being. Other Shandong, Northeast and Anhui individual urea plants have been repaired. The other factories generally maintain a high level of construction. According to the statistics of China Fertilizer Network, the overall industry operating rate of urea enterprises is 63.6. %, the total daily output is about 159,600 tons, and so far most urea companies have not clearly stated that there will be maintenance plans next, so the overall construction will remain high. In addition, under the double inspection of environmental protection and safety, some small and medium-sized chemical enterprises with ammonia limit production or stop production, while liquid ammonia enterprises started to work more, resulting in excess supply of goods, the liquid ammonia market is weakening, and local prices continue to fall. It is not ruled out that some enterprises reduce the amount of ammonia released, and the production center of gravity is slightly inclined to urea. It is necessary to be warned that the high opening of the trade union once again lowers the sales price of urea.


Demand is intermittent and not concentrated enough, and the wait-and-see attitude is obvious. The demand for agriculture is weak. In some areas, the application of fertilizer is arid or heavy rain, and the time is postponed repeatedly. The terminal procurement is on-demand; the large-scale agricultural dealers reserve the same way, which is to avoid the risk of some reserve. With the mining, and according to some dealer feedback, there is still inventory to be digested. In the industry, the operating rate of compound fertilizer enterprises is low, and the production enthusiasm is not high. There are many cases where enterprises in the local market are gradually parking, and the purchase amount of each NPK raw material fertilizer is reduced.


Good news in the international market is coming. First, according to news, India may issue a new tender on June 26. The schedule may be in early August. At the same time, China's domestic urea companies are expecting a further turnaround. At the same time, they will have good profits. Once they continue to export, they will ease the domestic market. The pressure of shipments supports the strong domestic urea price; the second is that the international urea price has risen slightly, stimulating the sensitive nerves of domestic urea enterprises, and seeing favorable benefits under many negative factors.


In the final comprehensive view, whether it is the sign before the general increase or the joint speculation of the manufacturers, the price increase is a good thing. To a certain extent, it stimulates the downstream delivery and payment, and increases the pre-receive orders of the urea enterprises; The contradiction between supply and demand and the consistent operation style of large agricultural enterprises, this round of urea price hike is still likely to be thunder and heavy rain, small and small troubles can not afford the big storm.


In addition, other product fertilizer products (such as NPK, WSF, CAN, DAP, FCMP, SOP, KDP, MOP, Organic-Inorganic Compound Fertilizers, Water soluble fertilizers etc) may also usher in a new round of price increases.