Weekly Urea Market Report for the First Week of January 2017

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Weekly Report on the Urea Market for the First Week of January
Author/Source: China Fertilizer Network
Date: 2017-01-09
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The smog situation was severe once again; under the pressure of environmental inspections, the operating rate of urea production plants increased slightly before dropping again at the beginning of this week. Urea prices remained high in many areas. However, due to these environmental inspections, some downstream industrial compound fertilizer manufacturers also reduced their production capacity, leading to a decrease in orders. In the second half of the week, the rain and snow in regions such as Shandong and the Two Rivers areas helped to reduce the smog, and the operating rate of urea production plants increased slightly. The combination of smog and weather conditions made it more difficult to transport urea, so urea prices in Shandong, the Two Rivers areas, Jiangsu, and Anhui remained stable overall. There were slight price increases in the first half of the week, while in the second half, prices stayed stable in some areas but decreased in others. However, there is a significant shortage in the urea market in regions such as the northwest and southwest, leading to continued increases in factory prices. Compared to last weekend, the operating rate of urea manufacturers in Shandong region has slightly decreased to... (the omitted details can be found in the member area; the same applies hereafter). The prevailing ex-plant prices remain stable at 1660–1670 yuan per ton. However, due to fog and snow weather, the shipment of urea has been hindered, and industrial compound fertilizer manufacturers have received slightly less supply in the past two days. As a result, some urea producers have offered slightly greater discounts. The purchase price in Linyi…… ； The situation in the Two Rivers region is similar to that in Shandong: mainstream factory prices remain stable for now, while some manufacturers have increased the extent of their discounts ； In the Shanxi region, the prevailing ex-factory price of urea first rose sharply before falling to 1570–1600 yuan. The volume of shipments by road transported by manufacturers decreased slightly, while shipments by rail increased slightly; the price at the first delivery point in Guangxi dropped slightly for some manufacturers…… ； The urea market in Anhui region has seen little change, with some manufacturers reporting a slight slowdown in shipments ； A large factory in the Jiangsu region resumed production at the beginning of this week, but the overall production rate remains low. Demand from the agricultural sector is slightly better, and the mainstream ex-factory prices have stabilized at 1750–1780 yuan ； The utilization rate of urea production in Hubei is low, and the manufacturers that are operating do so mainly to produce their own compound fertilizers; as a result, the amount of urea available for sale is limited. Therefore, the mainstream ex-factory prices have increased by 20–50 yuan, reaching around 1700 yuan ； The mainstream ex-factory prices in Shaanxi have stabilized after rising this Thursday; a urea manufacturer in Ningxia suspended production for maintenance again today, causing the mainstream ex-factory prices to rise by 50 yuan to around 1,450 yuan ； The local sales of urea in Sichuan and Chongqing, as well as its export to the southeast region, remain strong; as a result, the mainstream ex-factory price in Sichuan has risen to 1700–1730 yuan, while the corresponding price in Chongqing has increased to around 1740 yuan ； The difficulties in transporting urea out of Xinjiang have seen some improvement recently. The price of urea delivered to the Guangdong and Guangxi regions, as well as the Hunan and Hubei regions, is 1830–1850 yuan per ton, which is equivalent to the price at the manufacturer’s outlet… As a result, the standard export price from Xinjiang has increased by 30–50 yuan, reaching 1200–1250 yuan per ton. However, manufacturers say that demand for sales within the local market remains low ； There is a significant shortage in the urea market in the Northeast, with one large factory in Heilongjiang still shut down. Another large factory in Jilin is likely to resume production next week. Manufacturers in Liaoning are maintaining high prices for their products. The standard export prices to the Northeast have risen by 50–100 yuan, reaching 1400–1450 yuan, while the prices for delivery to destinations in the Northeast have increased to 1700–1750 yuan. International urea prices are generally on the rise. Overall, under the pressure of environmental inspections, most urea manufacturers are operating at reduced capacity, resulting in a consistently low utilization rate across the urea industry. However, due to high urea prices, some of these manufacturers have started operations again (the rate increased by about 1 percentage point compared to the previous weekend, reaching...); meanwhile, the demand for industrial compound fertilizers in regions such as Shandong has slightly decreased (the national utilization rate for compound fertilizers dropped by about 3 percentage points to around 62%). Fog, rain, and snow also affect the shipment of urea. It is also reported that demand for goods from other provinces in regions such as Hubei and Guangdong has temporarily decreased. It is expected that prices will remain stable overall, though there is a risk of a decline in prices for urea in certain areas. (Che Yanhong)