Industry News
International urea prices are consolidating at a high level, and the atmosphere of the Spring Festival is becoming increasingly strong
On the one hand, domestic price increases have little to do with international relations. Although there have been false reports of loose exports in the market and rumors of a small number of export orders from November last year waiting to be executed, they are currently all hype and tricks, either stimulating downstream customers to take orders before the Spring Festival or cooperating with futures traders to hedge. The atmosphere has led to domestic urea manufacturers persistently increasing prices from last Thursday and Friday, to continuing to rise until Monday and December this week, with more emphasis on using price increases to drive transactions, More often, some intermediaries are taking the opportunity to dispose of their urea inventory.
On the one hand, the international rise is due to the surplus temperature of the Indian mark on January 5th. For example, India only purchased 647000 tons of urea, and international urea suppliers are not in a hurry to sell. They can also use supplying India (with a shipping date of February 29th) to raise urea prices in other countries. The offshore price of urea in Egypt has risen from the low point of around $335/ton at the end of December to the current high point of $405/ton, which has made some industry insiders eager to try, The rumors of loose exports can indeed have a certain effect, but we need to pay attention to the fact that, except for special orders, early orders, and orders agreed upon between governments, the time when exports can be made is still unknown under the premise of ensuring spring cultivation. It may be in March or even later, and they are all quota systems, which only have occasional effects on domestic urea prices and are difficult to continue to drive up domestic urea prices.
Especially once China can export more appropriately, foreign investors will quickly make a decision to lower prices. Since the printing of the label, some international market insiders have only believed that the international urea prices in February were only consolidating at a high level. Since it has been consolidating, considering the recent increase in international production, it is estimated that the international urea prices will not stay at a high level for too long during February. The international urea prices are likely to be the last to go crazy, especially in the context of China's low export volume, In the absence of significant variables in international energy, geopolitical, and war factors in the future, international urea should rationally return to the level before the mask.
On the other hand, it seems customary for urea prices to rise in China as the Spring Festival approaches. The special aspect of this year is that urea manufacturers have further advanced their payment schedules. Some have already considered the issue of receiving payments during the Spring Festival before January 10th. In addition to ordering the amount of urea for the week at that time, they have already made appropriate payments. Especially since January 25th, manufacturers in Shandong, Shanxi, and other places have experienced even greater and faster declines. I believe that the frequent increase in urea prices in recent days is also expected by everyone, The consensus in the urea market is that the price drops deeply and rises quickly. It is important to use price increases to drive transactions. Only when prices rise can buyers who have previously purchased goods feel a little more comfortable, and when prices rise can they sell well. After all, it is important to buy higher rather than lower.
Today or the next few days, domestic urea prices may be the final frenzy. It's not that the author dismantled the market. Futures have risen by more than 100 yuan and weakened, indicating the end of this round of speculation. Local auto freight rates in the spot market have risen, and industrial customers are taking a break. The atmosphere of the Spring Festival holiday will become even stronger in a few days. If it continues to rise, it will not be convincing for end buyers.
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