Urea: the market is down in a narrow range, and the price is still high
June 12, 2024, 9:21 AM
China Agricultural Media
2607
Guide
Highlights at a glance
The domestic urea market is currently experiencing weak and volatile conditions despite being in the peak spring ploughing season. Prices have slightly declined in major producing regions like Shandong, Hebei, and Henan by 20–50 yuan/ton, while remaining stable in areas such as Shanxi and Inner Mongolia. High upstream prices, tight logistics—especially cross-provincial transport disruptions due to the pandemic—and delayed agricultural demand have contributed to constrained supply and cautious downstream purchasing. Although industrial demand from compound fertilizers, melamine, and panel industries remains steady, agricultural top-dressing for wheat is winding down, creating a seasonal inflection point. Delays in spring farming activities compared to last year, coupled with low social inventories and strong demand for high-nitrogen compound fertilizers, have kept urea prices elevated. With ammonium chloride prices surging, urea has become a more economical nitrogen source, further boos
At present, the domestic spring ploughing market is in full swing. The domestic urea market is down in a narrow range, the downstream maintains on-demand purchases, the urea plant's start-up load has picked up, manufacturers mainly supply advance orders, downstream industrial demand is low and moderate purchases are made, and inter-provincial logistics capacity is not smooth. It is expected that the domestic urea market will fluctuate in a short period of time, and new orders will follow up with the market, and the price will still run at a high level.
The market is weak and volatile
This week, the domestic urea market was running weakly, the market trading atmosphere became weaker, and the prices in mainstream areas loosened. According to the reporter of "China Agricultural Materials", the mainstream ex-factory price of urea in Shandong, Hebei, Henan, Anhui, Shaanxi and other regions has recently been reduced by 20~50 yuan/ton, and the mainstream ex-factory price of small and medium granules in Shandong is 2860~2920 yuan/ton; Shanxi, The ex-factory quotations of urea in Inner Mongolia, Xinjiang, Guangdong, Guangxi and other regions are temporarily stable.
Li Xiao, Nitrogen Fertilizer Product Manager of CNOOC Fudao (Shanghai) Chemical Co., Ltd., analyzed that the ex-factory price of urea in some areas of domestic mainstream urea production has recently decreased. After a round of rapid ups and downs, policy changes in the Jincheng area drove the price of the main producing areas to break through 3,000 yuan/ton and then fell back to 2,920 yuan/ton. It is reported that the shutdown of Jincheng area can affect the daily output of 9,000 tons of urea, so this round of shutdown will have a greater impact on the urea market. Second, due to the recent impact of the new crown pneumonia epidemic in many places, transportation and delivery have been hindered, especially the cross-provincial logistics has been restricted, and dealers' fertilizer preparation has been affected to a certain extent, and the amount of downstream goods has been reduced. Third, according to traditional practice, from late March to early April, the season for top dressing of wheat basically ended, agricultural demand weakened, and the market appeared at an inflection point, and price corrections were normal market fluctuations.
Xu Hao, deputy general manager of Sichuan Beifeng Agricultural Materials Co., Ltd., said that the domestic urea market has been running weakly recently, and the market transaction atmosphere is general. Although it is currently in the peak season for spring ploughing and fertilizer preparation, the high price has restrained the advancement of some demand, and the downstream purchasing mentality is cautious. In the industrial aspect, the construction of plates, compound fertilizers and melamine can be started, and the demand is still advancing steadily. On the whole, the current industrial and agricultural demand is in the peak season, and the demand side is still supported. After the urea price falls appropriately, the downstream will continue to follow up the purchase, and it is difficult for the urea market to drop sharply for the time being.
In terms of price, the ex-factory price of small and medium-sized urea in Shandong is 2860~2920 yuan/ton, the price is reduced by 20~50 yuan/ton, the new orders are sold at low prices, and the purchase of compound fertilizer is done step by step; the ex-factory price of small and medium-sized granules in Hebei is 2920~2950 yuan/ton , the ex-factory price is reduced by 20 yuan/ton, the local installation is short-term, and the logistics outside the province is not smooth; the mainstream ex-factory quotation of small and medium-sized particles in Henan is 2880~2900 yuan / ton, and the quotation of some enterprises is reduced by 20~50 yuan / ton, short-term operation by merchants; Shanxi Small and medium granular urea in the region is 2830~2880 yuan / ton, large granular urea is 2870~2890 yuan / ton, the quotation is temporarily stable, and the installation is gradually increasing.
On the whole, the country is in the peak season for spring ploughing fertilizer. Due to the poor logistics capacity in many places, although various regions actively coordinate the transportation of urea and other agricultural materials to ensure the normal supply of chemical fertilizers, the inter-provincial logistics capacity is still slightly sluggish, resulting in domestic urea transportation. The liquidity of spot supply in various provinces has obviously tightened. At this stage, after the rapid fluctuation of the domestic urea market, it will be temporarily stabilized and operated in a short period of time. New orders will follow the market in a short period of time, and the inventory of enterprises will increase slightly.
Fertilizer for spring ploughing is later than the same period last year
Yang Tongyu, deputy general manager of Henan Jinkai Group Yanhua Chemical Co., Ltd., said that due to the low temperature after the Spring Festival this year, the start of spring ploughing and fertilizer was slightly later than the same period last year. In addition, the logistics and transportation between regions were obviously not smooth, and the spot market circulation continued to decrease. Lay the foundation for the domestic urea price has been running at a high level. At the same time, due to limited logistics, the downstream secondary purchases have caused the urea market liquidity to tighten again to a certain extent.
In this regard, Xu Hao also said that due to the impact of the start of spring ploughing and fertilizer use this year later than the same period last year, coupled with the impact of the epidemic in the northeast region, poor logistics, a large nitrogen fertilizer gap, and the industry's unsatisfactory market outlook, the superimposed influence of factors such as direct lead to Spring market demand and summer market demand are released in a concentrated manner, and the fertilizer season will be relatively concentrated. It cannot be ruled out that prices will rise again in the fertilizer season. However, according to the current favorable domestic urea market price, the urea market price will still be at a high level. A sharp decline is less likely.
For why the domestic urea price in the spring market has been high? Li Xiao believes that the most important factor is the strong demand. First, this year, affected by the high price of potash fertilizer and the shortage of goods, the production of high-nitrogen compound fertilizers by compound fertilizer enterprises has increased, and the purchase of urea has also increased compared with the same period. Second, ammonium chloride, known as a small nitrogen fertilizer, was also the first choice for many factories to replace urea in previous years. This year, the price of ammonium chloride has more than doubled compared with the same period of previous years, reaching 1,500 yuan / ton. If urea is used to produce compound fertilizer , which is higher than the cost of using urea, so this has also led to an increase in the demand for urea this year compared with previous years. Third, since the fourth quarter of last year, the domestic urea market price has been running at a high level. Except for large and medium-sized enterprises with commercial reserve tasks, other enterprises have relatively small reserves of urea, social inventory is low, and the price of advance orders received by manufacturers is also high. , to a certain extent, it also affects the high price of urea in China, which further leads to the high price of urea in the domestic urea market in spring.
On the whole, it is expected that the domestic urea market will still maintain a strong operation after April. At present, it is in the period when the domestic spring ploughing fertilizer peak season demand and industrial demand continue to follow up. The urea market price may continue to remain high, and the price will not drop sharply. Possibly, with the slow follow-up of the Northeast market demand in the later period, the overall market tone will run at a stable medium-high level.
The market is weak and volatile
This week, the domestic urea market was running weakly, the market trading atmosphere became weaker, and the prices in mainstream areas loosened. According to the reporter of "China Agricultural Materials", the mainstream ex-factory price of urea in Shandong, Hebei, Henan, Anhui, Shaanxi and other regions has recently been reduced by 20~50 yuan/ton, and the mainstream ex-factory price of small and medium granules in Shandong is 2860~2920 yuan/ton; Shanxi, The ex-factory quotations of urea in Inner Mongolia, Xinjiang, Guangdong, Guangxi and other regions are temporarily stable.
Li Xiao, Nitrogen Fertilizer Product Manager of CNOOC Fudao (Shanghai) Chemical Co., Ltd., analyzed that the ex-factory price of urea in some areas of domestic mainstream urea production has recently decreased. After a round of rapid ups and downs, policy changes in the Jincheng area drove the price of the main producing areas to break through 3,000 yuan/ton and then fell back to 2,920 yuan/ton. It is reported that the shutdown of Jincheng area can affect the daily output of 9,000 tons of urea, so this round of shutdown will have a greater impact on the urea market. Second, due to the recent impact of the new crown pneumonia epidemic in many places, transportation and delivery have been hindered, especially the cross-provincial logistics has been restricted, and dealers' fertilizer preparation has been affected to a certain extent, and the amount of downstream goods has been reduced. Third, according to traditional practice, from late March to early April, the season for top dressing of wheat basically ended, agricultural demand weakened, and the market appeared at an inflection point, and price corrections were normal market fluctuations.
Xu Hao, deputy general manager of Sichuan Beifeng Agricultural Materials Co., Ltd., said that the domestic urea market has been running weakly recently, and the market transaction atmosphere is general. Although it is currently in the peak season for spring ploughing and fertilizer preparation, the high price has restrained the advancement of some demand, and the downstream purchasing mentality is cautious. In the industrial aspect, the construction of plates, compound fertilizers and melamine can be started, and the demand is still advancing steadily. On the whole, the current industrial and agricultural demand is in the peak season, and the demand side is still supported. After the urea price falls appropriately, the downstream will continue to follow up the purchase, and it is difficult for the urea market to drop sharply for the time being.
In terms of price, the ex-factory price of small and medium-sized urea in Shandong is 2860~2920 yuan/ton, the price is reduced by 20~50 yuan/ton, the new orders are sold at low prices, and the purchase of compound fertilizer is done step by step; the ex-factory price of small and medium-sized granules in Hebei is 2920~2950 yuan/ton , the ex-factory price is reduced by 20 yuan/ton, the local installation is short-term, and the logistics outside the province is not smooth; the mainstream ex-factory quotation of small and medium-sized particles in Henan is 2880~2900 yuan / ton, and the quotation of some enterprises is reduced by 20~50 yuan / ton, short-term operation by merchants; Shanxi Small and medium granular urea in the region is 2830~2880 yuan / ton, large granular urea is 2870~2890 yuan / ton, the quotation is temporarily stable, and the installation is gradually increasing.
On the whole, the country is in the peak season for spring ploughing fertilizer. Due to the poor logistics capacity in many places, although various regions actively coordinate the transportation of urea and other agricultural materials to ensure the normal supply of chemical fertilizers, the inter-provincial logistics capacity is still slightly sluggish, resulting in domestic urea transportation. The liquidity of spot supply in various provinces has obviously tightened. At this stage, after the rapid fluctuation of the domestic urea market, it will be temporarily stabilized and operated in a short period of time. New orders will follow the market in a short period of time, and the inventory of enterprises will increase slightly.
Fertilizer for spring ploughing is later than the same period last year
Yang Tongyu, deputy general manager of Henan Jinkai Group Yanhua Chemical Co., Ltd., said that due to the low temperature after the Spring Festival this year, the start of spring ploughing and fertilizer was slightly later than the same period last year. In addition, the logistics and transportation between regions were obviously not smooth, and the spot market circulation continued to decrease. Lay the foundation for the domestic urea price has been running at a high level. At the same time, due to limited logistics, the downstream secondary purchases have caused the urea market liquidity to tighten again to a certain extent.
In this regard, Xu Hao also said that due to the impact of the start of spring ploughing and fertilizer use this year later than the same period last year, coupled with the impact of the epidemic in the northeast region, poor logistics, a large nitrogen fertilizer gap, and the industry's unsatisfactory market outlook, the superimposed influence of factors such as direct lead to Spring market demand and summer market demand are released in a concentrated manner, and the fertilizer season will be relatively concentrated. It cannot be ruled out that prices will rise again in the fertilizer season. However, according to the current favorable domestic urea market price, the urea market price will still be at a high level. A sharp decline is less likely.
For why the domestic urea price in the spring market has been high? Li Xiao believes that the most important factor is the strong demand. First, this year, affected by the high price of potash fertilizer and the shortage of goods, the production of high-nitrogen compound fertilizers by compound fertilizer enterprises has increased, and the purchase of urea has also increased compared with the same period. Second, ammonium chloride, known as a small nitrogen fertilizer, was also the first choice for many factories to replace urea in previous years. This year, the price of ammonium chloride has more than doubled compared with the same period of previous years, reaching 1,500 yuan / ton. If urea is used to produce compound fertilizer , which is higher than the cost of using urea, so this has also led to an increase in the demand for urea this year compared with previous years. Third, since the fourth quarter of last year, the domestic urea market price has been running at a high level. Except for large and medium-sized enterprises with commercial reserve tasks, other enterprises have relatively small reserves of urea, social inventory is low, and the price of advance orders received by manufacturers is also high. , to a certain extent, it also affects the high price of urea in China, which further leads to the high price of urea in the domestic urea market in spring.
On the whole, it is expected that the domestic urea market will still maintain a strong operation after April. At present, it is in the period when the domestic spring ploughing fertilizer peak season demand and industrial demand continue to follow up. The urea market price may continue to remain high, and the price will not drop sharply. Possibly, with the slow follow-up of the Northeast market demand in the later period, the overall market tone will run at a stable medium-high level.
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June 12, 2024, 9:21 AM
June 12, 2024, 9:21 AM