Industry News
There is currently no inventory pressure, and there may be a risk of weakening in the urea market
The overall increase in urea over the past week has been limited, but as the printing mark approaches, urea seems to be eager to try, with the current increase in North China and East China being around 30-90 yuan/ton; The mainstream factory quotation for urea in the Northeast region is around 2438-2470 yuan/ton, the mainstream factory quotation for urea in the Inner Mongolia region is around 2200-2430 yuan/ton, and the mainstream factory quotation for urea in the Hebei region is around 2380-2450 yuan/ton. Downstream industries and agriculture are purchased in a step-by-step manner, and the delivery in the grassroots market is scattered. For example, the receiving price of urea by the compound fertilizer factory in Linyi, Shandong has stabilized at 2400 yuan/ton after an increase, and the wholesale price in local markets in central and eastern China is around 2430-2460 yuan/ton. Whether the price of urea can change from rising to falling in the later stage depends on the results of domestic supply and demand, policies, and labeling.
The supply of urea is sufficient. Even though some urea enterprises in Jincheng, Shanxi have been affected by environmental protection recently, resulting in production restrictions and a decrease in operating rates, urea enterprises in other regions have maintained high operating rates. According to statistics from China Fertilizer Network, the daily total production of urea still reaches about 174700 tons. In addition, in recent days, a new urea production capacity in a certain factory in Hubei has been operating, and the time for producing products is approaching. Comparing the increase and decrease situation, The supply of urea will still fluctuate between 160000 and 170000 tons; In the long run, there are also some urea production capacity that needs to be released for transformation and upgrading near the end of the year; However, there has been a significant rebound in the price of liquid ammonia in many regions, which supports urea in terms of production focus. However, the impact of liquid ammonia on urea is variable and requires rational reference.
Recently, the urea market has been supported by costs, and coal prices have been continuously rising. It is reported that the supply of natural gas will be limited, and prices have also increased to a certain extent, resulting in increased costs for urea enterprises; Secondly, the printing label has boosted the domestic market to a certain extent, thereby boosting the domestic market. However, urea exports are still limited, and with the policy of ensuring supply and stable prices in China, the final printing label may be loud, heavy, and small. Even if it causes a certain increase in domestic urea prices, the magnitude or duration may also be limited.
From a demand perspective, in the short term, with the support of just in need of goods, urea companies have a certain amount of pre received and pending orders in the near future, and there is currently no inventory pressure. There is a driving force for prices to rise or continue to rise slightly. However, in the agricultural sector, as the demand for wheat base fertilizer gradually ends, the urea market will enter the off-season. However, with the start of some manufacturers' off-storing in the later stage, prices will be appropriately lowered; In addition, the inventory level in the grassroots wholesale market is not high, and there is a resistance towards urea during the off-season, so wait-and-see is the main trend, with occasional scattered reserves or replenishment orders; Large traders lack confidence in urea and maintain a "on the go" operation mode; In terms of industrial production, the board factory is generally operating, while the compound fertilizer factory is operating at a low level. There is no significant improvement in production in the short term, and urea reserves are maintained on demand. However, large factories currently do not have a bottom reading reserve plan for urea.
Overall, in the short term, the relatively strong operation of the urea market is supported by rigid demand and printing marks. However, with the completion of pending orders and the settling of printing marks, there may be a risk of weakening in the urea market in the long run. However, attention should be paid to the progress of printing marks.
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