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Urea: What can you expect from a successful counterattack in 2016 in 2017? Author/Source: date: 2016-12-29 Click rate: 86 http://img8.fert.cn/image/20161229/20161229083483158315.jpg As can be seen from the comparison of the trends in the chart above, China's urea market as a whole showed a "V"-shaped trend in 2016, and reached the high point of the year at the end of the year. Especially with the finalization of the export tariff policy, companies have a strong intention to raise prices. Most companies in the main production areas have raised their quotations by 30-40 yuan/ton, and the ex-factory quotation in Shandong has risen to 1,600 yuan/ton. According to statistical data, the current average ex-factory price of urea in China is 1,580 yuan/ton, an increase of 9.95% from the beginning of the year, and an increase of 32.33% from the low in mid-August. The main reasons for the recent sharp rise in urea prices are:: Cost support has led to my country's anthracite coal market as a whole remaining stable in the near future. Only coal prices from a few mines in the main producing areas have adjusted. The trends of various coal types show obvious signs of differentiation. The price of lump coal is still relatively strong due to the support of civil demand, while the purchasing pace of downstream end users of late coal has slowed down and the pressure has increased. It is expected that coal mines will focus on ensuring safe production at the end of the year, and the output will not be high. As a result, coal prices will still maintain high levels, and the production costs of urea companies will be supported. ； In terms of transportation, rail transportation is still tight in some areas, and some areas choose to ship goods by truck. However, since the load limit of truck transportation, truck transportation costs have also increased. Furthermore, as the Spring Festival approaches, the tight transportation capacity will not be alleviated in the short term. Construction continues to be at a low level and coal is consolidating at a high level. The cost support point of urea companies is relatively high. Some companies that lack cost advantages have no plans to resume production. Recently, fog has been severe in many places, and environmental protection production restrictions have been implemented, which has further reduced the start-up of urea companies. Moreover, the recent market prices of liquid ammonia and methanol have been better than that of urea. Some joint production enterprises have switched to producing methanol and liquid ammonia, and the supply of urea is limited. At present, the operating rate of urea companies in Jiangsu is about 46%, the operating rate of urea companies in Shandong has dropped to about 44%, and the operating rate of urea companies in Hebei has only remained around 38%. Statistics show that the daily output of urea nationwide is around 129,000 tons, a decrease of 36.45% compared with the same period last year, and it is difficult to significantly increase the short-term start-up. Demand has improved slightly. At present, many places in China are in the off-season for agricultural demand, and fertilizer preparation has started slowly. Currently, there are only a small number of inquiries in some areas. As the domestic urea market fluctuated and declined before mid-August, most people were not optimistic about the market outlook, and agricultural stocking enthusiasm was sluggish. After September, domestic urea prices soared, especially reaching the current high, and agriculture was cautiously waiting to purchase goods. In terms of industrial demand, affected by the end of environmental protection production restrictions, some compound fertilizer companies are currently able to obtain goods, and industrial fertilizer transactions have improved compared with the previous period. Prices in the international urea market have been relatively strong recently. Despite the impact of the Double Festival, transaction prices have remained high, and the upward trend has continued into January 2017. Tariff Dust Settled On December 23, 2016, the Tariff Commission of the State Council announced the "Notice on the 2017 Tariff Adjustment Plan" and decided to cancel the export tariffs on nitrogen fertilizers, phosphate fertilizers and other fertilizers, and appropriately reduce the export tariffs on ternary compound fertilizers. The removal of tariffs has brought benefits to the domestic urea market. China's urea export competitiveness has increased. Pay attention to India's new round of urea bidding in the near future. If the urea operating rate continues to be low, coupled with local transportation capacity constraints leading to uncoordinated supply distribution, the urea market will be tight in the spring, domestic trade will be overwhelmed, and China's urea exports may be limited in the short term. Taken together, costs are still supported, operating rates are unlikely to increase in the short term, local industrial demand is acceptable, and export tariffs have been removed. With all the favorable supporting factors, the domestic urea market price continues to rise. Environmental inspections continue to be strong, and some urea companies have no hope of resuming production. If the tight transportation capacity situation is not alleviated, the urea market will be out of stock during the Spring Festival. The urea market is full of expectations in 2017. (Zhuochuang Information)