32
Urea: Sudden Benefit Helps Market Strengthen Again
2023/9/15
In August, the urea market, which had already entered the off-season of agricultural demand, did not continue to decline as expected. Instead, it strengthened against the trend after a brief decline at the beginning of the month, which is a bit surprising. "Liu Changqing, a agricultural materials dealer in Xiayi County, Shangqiu City, Henan Province, recently explained to reporters that the favorable export of large orders has driven the already weak urea market back up.
According to statistical data, the domestic urea market hit a mainstream transaction price of around 2000 yuan (ton price, the same below) in mid June this year, reaching a new low in nearly two years, and rebounded all the way to 2459 yuan at the end of July, an increase of 23%. In August, due to the arrival of the off-season of agricultural demand, the urea market began to weaken. In the first week of the month, the market fell back to 2390 yuan, a weekly decrease of 2.8%. Subsequently, the urea market began to steadily warm up, and by the end of August, the mainstream transaction price in China had exceeded 2550 yuan.
Significant growth in exports
I originally thought August was the off-season for agricultural demand, but seeing urea rising continuously for over a month, I wanted to purchase again when the prices fell during the off-season. I didn't want the news of the 'India Label' export large order in mid August to go through rumors, hype, and landing. In the end, China's supply volume was 1.12 million tons, accounting for 63.66% of India's bidding orders. One order exceeded the total export volume of urea in the first half of the year According to customs data, the urea export volume in the first half of the year was 1.0096 million tons. If all the sources of goods come from China, it will inevitably drive the domestic urea price, and this sudden benefit is one of the main factors that triggered the market to suddenly turn from weak to strong Liu Changqing responded.
According to Longzhong Information, as of the end of August, the mainstream transaction price of urea in China has returned to the highest level of the previous month and is showing a continued upward trend. As of August 31st, the urea market in Shandong region rose by 20 yuan, with mainstream factory prices for small and medium-sized particles ranging from 2550 to 2580 yuan and mainstream factory prices for large particles ranging from 2720 to 2770 yuan. On September 1st, the urea market in Henan Province experienced a resurgence of general growth, with an increase in new orders and mainstream factory quotations increasing by 10-30 yuan to 2580-2610 yuan.
Stable increase in industrial demand
Although agricultural demand decreased in August, industrial demand showed a steady growth trend. In August, the urea market gradually entered the stage of concentrated supply of autumn fertilizers, and the average operating rate of composite fertilizer enterprises in that month had significantly increased compared to the previous month. As of early September, the comprehensive operating rate of domestic composite fertilizer plants had reached over 50%, reaching its peak in the first half of the year. Therefore, the procurement volume of raw material urea by composite fertilizer enterprises is still steadily increasing A senior fertilizer dealer in Zhengzhou stated that melamine plants in various regions have also been increasing production, and industrial procurement has to some extent supported the current domestic demand for urea. Especially in terms of price transmission, industrial demand prices are more acceptable than agricultural demand, making it easier to digest the increase in urea prices.
Low level of enterprise inventory
According to statistics from Baichuan Yingfu, the domestic urea production in August was about 5.27 million tons, a decrease of 1.33% compared to the previous month. In September, there are still plans to suspend production and maintenance in Shanxi Heshun, Jiangsu Linggu, and Xinjiang Kuitun. Anhui Liuguo Chemical's 300000 ton/year urea plant will be shut down for maintenance on August 15th, and production is expected to resume in October. Although the renovation plant of Shandong Mingshui Chemical Industry is about to be put into operation soon, and the expansion projects of Henan Xinlianxin and Hualu Hengsheng (Jingzhou) are also expected to be put into operation in September, overall, there is little change in the new urea supply capacity.
At present, the overall operating rate of urea in China remains around 70% (effective production capacity) There has been a decrease compared to the previous period. Due to the company's early parking and maintenance, and not having much inventory, our company is currently operating at a relatively high price of 2550 yuan. We are now starting production at full capacity to supplement the significant reduction in production due to early parking. Although agricultural demand has weakened, statistical data shows that agricultural demand accounted for over 65% of the total demand for urea in the first half of the year, which is the driving force behind the market's recovery. In addition, as we are about to enter the winter storage stage, in the current context of low inventory in society, the market is still in a strong support situation in the short term Liu Weiwei, Manager of the Marketing Information Center of Zhongyuan Dahua Sales Company, told reporters.
Warm market, don't forget light market
At present, due to the impact of the launch of the compound fertilizer market, the demand for urea in the market is relatively stable, and the overall situation is in a balanced state of procurement and sales. The spot market price of urea fluctuates slightly with changes in futures market prices. According to the spot price of urea, most urea enterprises can basically be in a low profit state, which is conducive to the healthy development of urea production enterprises. "said Zhu Junfei, Executive Vice General Manager of the Sales Branch of Henan Jinkai Group, The enterprise actively responds to the market demand for agricultural materials and fertilizers to ensure supply. The three urea plants under the company are all in full production and are promptly launched into the market, contributing to ensuring food security. But the warm market cannot forget the off-season, and enterprises should prepare for the rainy season.
Zhu Junfei told reporters that with the continuous production of new urea production capacity in the fourth quarter, the domestic urea market is facing a severe situation of oversupply. At the same time, as the agricultural materials market gradually enters the traditional winter off-season, the operational pressure faced by urea production enterprises will gradually increase. Faced with this situation, enterprises should layout in advance from multiple aspects such as raw materials, production, and sales. Actively carry out the sales work of "protecting the market, stabilizing the market, and expanding the market", and actively respond to potential market changes.
According to statistical data, the domestic urea market hit a mainstream transaction price of around 2000 yuan (ton price, the same below) in mid June this year, reaching a new low in nearly two years, and rebounded all the way to 2459 yuan at the end of July, an increase of 23%. In August, due to the arrival of the off-season of agricultural demand, the urea market began to weaken. In the first week of the month, the market fell back to 2390 yuan, a weekly decrease of 2.8%. Subsequently, the urea market began to steadily warm up, and by the end of August, the mainstream transaction price in China had exceeded 2550 yuan.
Significant growth in exports
I originally thought August was the off-season for agricultural demand, but seeing urea rising continuously for over a month, I wanted to purchase again when the prices fell during the off-season. I didn't want the news of the 'India Label' export large order in mid August to go through rumors, hype, and landing. In the end, China's supply volume was 1.12 million tons, accounting for 63.66% of India's bidding orders. One order exceeded the total export volume of urea in the first half of the year According to customs data, the urea export volume in the first half of the year was 1.0096 million tons. If all the sources of goods come from China, it will inevitably drive the domestic urea price, and this sudden benefit is one of the main factors that triggered the market to suddenly turn from weak to strong Liu Changqing responded.
According to Longzhong Information, as of the end of August, the mainstream transaction price of urea in China has returned to the highest level of the previous month and is showing a continued upward trend. As of August 31st, the urea market in Shandong region rose by 20 yuan, with mainstream factory prices for small and medium-sized particles ranging from 2550 to 2580 yuan and mainstream factory prices for large particles ranging from 2720 to 2770 yuan. On September 1st, the urea market in Henan Province experienced a resurgence of general growth, with an increase in new orders and mainstream factory quotations increasing by 10-30 yuan to 2580-2610 yuan.
Stable increase in industrial demand
Although agricultural demand decreased in August, industrial demand showed a steady growth trend. In August, the urea market gradually entered the stage of concentrated supply of autumn fertilizers, and the average operating rate of composite fertilizer enterprises in that month had significantly increased compared to the previous month. As of early September, the comprehensive operating rate of domestic composite fertilizer plants had reached over 50%, reaching its peak in the first half of the year. Therefore, the procurement volume of raw material urea by composite fertilizer enterprises is still steadily increasing A senior fertilizer dealer in Zhengzhou stated that melamine plants in various regions have also been increasing production, and industrial procurement has to some extent supported the current domestic demand for urea. Especially in terms of price transmission, industrial demand prices are more acceptable than agricultural demand, making it easier to digest the increase in urea prices.
Low level of enterprise inventory
According to statistics from Baichuan Yingfu, the domestic urea production in August was about 5.27 million tons, a decrease of 1.33% compared to the previous month. In September, there are still plans to suspend production and maintenance in Shanxi Heshun, Jiangsu Linggu, and Xinjiang Kuitun. Anhui Liuguo Chemical's 300000 ton/year urea plant will be shut down for maintenance on August 15th, and production is expected to resume in October. Although the renovation plant of Shandong Mingshui Chemical Industry is about to be put into operation soon, and the expansion projects of Henan Xinlianxin and Hualu Hengsheng (Jingzhou) are also expected to be put into operation in September, overall, there is little change in the new urea supply capacity.
At present, the overall operating rate of urea in China remains around 70% (effective production capacity) There has been a decrease compared to the previous period. Due to the company's early parking and maintenance, and not having much inventory, our company is currently operating at a relatively high price of 2550 yuan. We are now starting production at full capacity to supplement the significant reduction in production due to early parking. Although agricultural demand has weakened, statistical data shows that agricultural demand accounted for over 65% of the total demand for urea in the first half of the year, which is the driving force behind the market's recovery. In addition, as we are about to enter the winter storage stage, in the current context of low inventory in society, the market is still in a strong support situation in the short term Liu Weiwei, Manager of the Marketing Information Center of Zhongyuan Dahua Sales Company, told reporters.
Warm market, don't forget light market
At present, due to the impact of the launch of the compound fertilizer market, the demand for urea in the market is relatively stable, and the overall situation is in a balanced state of procurement and sales. The spot market price of urea fluctuates slightly with changes in futures market prices. According to the spot price of urea, most urea enterprises can basically be in a low profit state, which is conducive to the healthy development of urea production enterprises. "said Zhu Junfei, Executive Vice General Manager of the Sales Branch of Henan Jinkai Group, The enterprise actively responds to the market demand for agricultural materials and fertilizers to ensure supply. The three urea plants under the company are all in full production and are promptly launched into the market, contributing to ensuring food security. But the warm market cannot forget the off-season, and enterprises should prepare for the rainy season.
Zhu Junfei told reporters that with the continuous production of new urea production capacity in the fourth quarter, the domestic urea market is facing a severe situation of oversupply. At the same time, as the agricultural materials market gradually enters the traditional winter off-season, the operational pressure faced by urea production enterprises will gradually increase. Faced with this situation, enterprises should layout in advance from multiple aspects such as raw materials, production, and sales. Actively carry out the sales work of "protecting the market, stabilizing the market, and expanding the market", and actively respond to potential market changes.
Industry insiders analyze that in the current context of low inventory and new growth in the urea market, favorable factors dominate, and market prices are still rising. However, downstream companies are also constantly resisting high prices. In addition, after the export factors are digested, the urea market will continue to increase in the aftermarket game after considering the influence of various parties, and it is not ruled out that there is still a possibility of volatility. In response to the current market situation, it is recommended that upstream and downstream enterprises maintain reasonable inventory, actively monitor domestic and international market trends, adjust marketing strategies in a timely manner, seize opportunities, and avoid risks.
JIN DUN CHEMICAL has built a special (meth) acrylic monomer manufacturing base in ZHEJIANG province. This makes sure the stable supply of HEMA, HPMA, HEA, HPA, GMA with high level quality. Our special acrylate monomers are widely used for thermosetting acrylic resins, crosslinkable emulsion polymers, acrylate anaerobic adhesive, two-component acrylate adhesive, solvent acrylate adhesive, emulsion acrylate adhesive, paper finishing agent and painting acrylic resins in adhesive.We have also developed the new and special (meth) acrylic monomers and derivatives. Such as the fluorinated acrylate monomers, It can be widely used in coating leveling agent, paints, inks, photosensitive resins, optical materials, fiber treatment, modifier for plastic or rubber field. We are aiming to be the top supplier in the field of special acrylate monomers, to share our rich experience with better quality products and professional service.
