Urea Weekly Report: Rising international prices and rising futures prices increased orders in the week (No. 20230721)

01Market overview

1.1 Feidoodoo Price index

This week, the average price of domestic urea small particle price index was 2399.82, up 20.55 from last week, up 0.15% from the previous month. At the beginning of the week, the spot price of urea fell, and then driven by international prices and futures prices, the spot price rose again, and the market remained firm. Futures continued to rise to promote the spot buying sentiment, enterprise orders increased, it is reported that some factories have limited the sale of orders. However, with the price rise, some areas of the downstream began to appear resistance, cover the progress slowed down, the market wait-and-see atmosphere began to appear.

1.2 Urea delivery area quotation

Specifically, the price in the northeast rose to 2170-2260 yuan/ton. In North China, the price rose to 2220-2400 yuan/ton. The price in Northwest China is stable at 2420-2430 yuan/ton. The price in southwest China is stable at 2350-3000 yuan/ton. In East China, the price rose to 2,370-2,460 yuan/ton. In central China, the price of small and medium-sized particles fell to 2370-2560 yuan/ton, and the price of large particles rose to 2380-2420 yuan/ton. The price in South China is stable at 2550-2650 yuan/ton.

1.3 Urea futures base spread & spread

1.4 Distribution of futures warehouse receipt

As of Friday, Zhengshang Exchange urea futures 1319, down 401 from last week. The total delivery in July was 472.

02 Industry chain dynamics

2.1 Nissan recovered rapidly

This week, domestic urea production was about 1.1421 million tons, down 0.17% month-on-month, up 6.31% year-on-year; The daily output is 163,200 tons, and the daily output varies little during the week. The operating rate of domestic urea industry was about 77.04%, down 0.13% month-on-month, up 8.29% year-on-year; The operating rate of the domestic urea industry declined in a narrow range, higher than the level of the same period last year.

From the point of view of the process, the production of coal to urea was about 861,000 tons, a decrease of 12,100 tons from last week, an increase of 78,900 tons from the same period last year, the operating rate was about 77.50%, down 1.09% from last week, up 9.86% from the same period last year; Gas urea production was about 281,100 tons, an increase of 10,100 tons from last week, a decrease of 11,100 tons from the same period last year, the operating rate of about 75.65%, down 2.72% from last week, up 3.75%.

2.2 Urea plant dynamics

2.3 Raw Material market

The coal market price rebounded this week, and the port coal price exceeded 900 yuan/ton. Traders welcome the summer kurtosis expected to be good, low-cost shipment intention is low. The high temperature has increased the daily consumption of the power plant, and the port inventory has continued to be destocked. Coal mine safety inspections have increased and market supply has tightened. Overseas thermal coal prices have stabilised and inflows of imported coal have declined. The weakening of domestic trade sentiment led to a decrease in import market inquiries; In addition, the price of imported coal is low, and the price of foreign mines is inverted, and most traders suspend operation.

However, the downstream chemical enterprises to maintain just need to replenish the inventory, traders mainly wait-and-see, procurement intention is low. In terms of anthracite lump coal, some urea enterprises have recently stopped production for maintenance, chemical enterprises have a slow pace of raw coal procurement, and more need to be replenishment, civilian customers' purchasing sentiment has cooled slightly, and traders have seen a decline in speculative demand based on the current market situation.

Port coal prices increased this week, Qinhuangdao thermal coal Q5500 offer 900 yuan/ton, last week increased 50 yuan/ton. The quotation of anthracite lump coal to the factory is 1000-1100 yuan/ton, and the price is 0 yuan/ton higher than last week.

2.4 Market inventory

This week, the domestic large particle urea port inventory of 43,000 tons, down 21,000 tons from last week, down 9,000 tons from the same period last year, large particle urea port volume declined within the week, lower than the same period last year.

This week, the domestic small particle urea port inventory of 77,000 tons, an increase of 24,000 tons from last week, an increase of 40,000 tons from the same period last year, higher than the same period last year.

This week, the inventory of enterprises was about 152,200 tons, up 0.46 million tons from the previous month; Port inventory totaled 80,000 tons, a decrease of 43.26% from the previous quarter.

2.5 Urea production profit

2.6 Compound fertilizer industry

This week, the domestic compound fertilizer market is stabilizing, and the wait-and-see atmosphere is heavy. In terms of raw materials, urea was supported by the international trend, the boost of futures and coal, and the market fell first and then rose, maintaining a range of oscillating market; Mono ammonium phosphate is buoyed by factors such as abundant enterprise readiness and just need to cover positions downstream, and the market speculation atmosphere is not reduced, and some prices continue to go up. Overall, the cost support of compound fertilizer is not reduced. On the enterprise side, the advance receipts are mainly based on policies such as non-priced interest guarantees or payment concessions, and new bids are rare, especially the wheat fertilizer price market continues to be unclear. In the southern rice region, demand has weakened, and enterprises are mainly taking orders and clearing goods. At present, the market is unstable due to the operation of raw materials, and the wait-and-see atmosphere is relatively heavy.

2.7 Melamine industry

This week, the overall focus of the domestic melamine market moved up, but the performance was mixed by region. Last week, the price in the northern region rose faster and larger, the downstream resistance mentality appeared, coupled with the decline in raw material urea prices over the weekend, melamine enterprises actively accepted orders, high-end prices fell; Last week, the price of the southwest region is relatively low compared with the north, and this week is mainly increased. Although the price of raw material urea rose again in the late week, the downstream receiving of goods was more cautious, and the melamine market trading was flat, and the price had no significant change. In the short term, the market wait-and-see mentality is strong, and the enterprises mainly take the orders received in advance and continue to pay attention to the trend of raw materials. The operating rate of the domestic melamine industry was 61.59%, down 1.89% from last week; The weekly production of melamine was 26,800 tons, down 3.25% from the previous week.

2.8 Price difference of related varieties

2.9 International market quotation

In the international market, the China FOB price of small bulk particles is 318-320 US dollars/ton, and the mainstream price is 3 US dollars/ton higher than last week; The Baltic FOB price is $300-330 / ton, and the mainstream price is up $10 / ton from last week.

The price of large particles FOB China is 340-350 US dollars/ton, the mainstream price is 20 US dollars/ton higher than last week; Iran's large particle FOB price of $306 / ton, the mainstream price increased by $16 / ton from last week.

2.10 Nitrogen fertilizer export situation

In May, domestic urea exports were 182,900 tons, and the cumulative export volume from January to May was 785,600 tons, an increase of 247,600 tons from last year.

03 Future market outlook

Supply: The current maintenance is gradually ending, and the daily output is increasing. New capacity is already on the way.

Inventory: Inventory declined further, factory inventories were low, and factories were more willing to raise prices. However, the beginning of the library is a matter of time, and the end of July is cautious.

Cost: Thermal coal prices are stable, but there is little room for rebound. The price of anthracite lump coal hit the bottom, and the fixed bed cost ended to explore.

Demand: agriculture needs to end, export demand short-term release, pay attention to the port situation. With low inventories, speculative demand appears.