Urea: Demand seems to exist or not, prices vary

After entering April, urea prices in the Central Plains have been adjusted appropriately with the decrease of demand and the increase of supply. Recently, urea factory prices in Lianghe and other places have dropped below 2000 yuan (ton price, the same below). It is rumored that Shanxi’s low price transaction has dropped to a little higher than 1900 yuan, but the overall receiving prices in the Northwest, Southwest and Northeast regions are slightly higher than those in the earlier period. There has been an increase, such as the quotation of some factories in Xinjiang has been screamed to more than 1800 yuan, the export price of high-end brands in Yunnan has also been more than 2200 yuan, and the arrival price of Heilongjiang market has also risen to more than 2200 yuan. At present, the urea market demand around the Central Plains has come to an end, but the domestic demand in some regions still exists, and prices are staggered. The downstream traders also have some difficulties in purchasing urea: are they picking up or temporarily on the sidelines? The author discusses this issue with the industry and draws the following conclusions: urea still has a certain risk of slipping in the near future, and procurement still needs to be cautious, mainly in the following aspects:

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Firstly, the overall operation of the enterprise is relatively high. Recently, with the gradual resumption of production of gas head urea enterprises, although some enterprises have also entered the state of overhaul, according to the statistics of China Chemical Fertilizer Network, the actual daily output of urea in China is still more than 150,000 tons, and some overhaul enterprises are about to resume production, while most large plants have no plan for overhaul, the overall supply pressure is gradually increasing, and some industries are expected to be around the end of April, urea Overall supply may exceed 160,000 tons, and historical data over the years show that when the overall production of urea exceeds 155,000 tons, the overall price is relatively likely to decline.

Secondly, the market demand is not urgent. Recent spring market orders are almost at the end. Although the summer fertilizer market mainly uses high nitrogen fertilizer, most downstream compound fertilizer plants are not in a hurry to purchase at present. On the one hand, there are still low-price orders to be issued in the early stage. Compound fertilizer enterprises are not short of stock in the short term. On the other hand, the current urea price is still on the high side. In order to avoid risks, some enterprises are still offering high prices. The urea industry only takes a stand-by attitude, waiting for the urea market to stabilize; and the export side is because the domestic price is relatively high, at least at this stage, the domestic urea export is temporarily hopeless, under the background of high start-up rate, urea price or there is a certain risk of decline.

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In addition, the demand of plywood factories and recent markets in northeast, northwest and southwest can not last long. The agricultural market will end before May, and the demand of plywood factories is out of gear. Some industries are expected to be the most prosperous when the enterprises have completed the execution of the orders in arrears, the price will decline further.

 

In summary, recent urea demand reflects slightly. Although some factories have done enough to meet the tense demand atmosphere, the downstream market is still relatively small. It is expected that the overall price of urea in the near future is stable and weak, and there is still a certain downside risk.

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