Weekly Urea Market Report for the Second Week of January 2017

Thread Content

Weekly Report on the Urea Market for the Second Week of January
Author/Source: China Fertilizer Network
Date: 2017-01-17
Clicks: 16

The adverse weather conditions improved slightly this week, leading to a modest increase in the operating rate of the urea industry. In some areas, prices were raised several times at the beginning of the week in an attempt to stimulate agricultural purchases. However, local distributors remained reluctant to stock up on fertilizers, and industrial demand slowed down as the year came to an end. As a result, urea prices remained stable on the surface but actually declined over the latter part of the week. A few urea manufacturers lowered their prices slightly in order to attract customers. Meanwhile, the operating rate of industrial compound fertilizers increased significantly due to the improvement in weather conditions, prompting a few urea manufacturers to raise their prices. Compared to last weekend, the mainstream ex-factory prices in Shandong region first rose and then fell to around 1660–1700 yuan per ton (the same unit is used hereafter). As the fog situation improved slightly, the operating rates of urea manufacturers increased slightly to... (some details are available in the member area; the same applies hereafter). New orders were average, with some manufacturers offering slightly larger discounts to encourage sales. The purchase price in Linyi rose slightly as the operating rate of compound fertilizers increased…… ； The mainstream ex-factory prices in the Two Rivers region have also seen a slight increase. In Hebei, the prices for high-end products have risen by 40 yuan, reaching 1620–1700 yuan. One major manufacturer resumed production on Wednesday, and as a result, there is no significant sales pressure at present; after two price increases, the price has reached 1700 yuan. In Henan, the mainstream ex-factory prices have increased by 10–20 yuan, reaching around 1680 yuan ； The number of orders awaiting shipment from urea manufacturers in Shanxi is generally high, and the shipping situation has also improved. However, as the end of the year approaches, there is less enthusiasm for receiving goods in various regions; as a result, the prevailing ex-factory prices have stabilized at 1550–1620 yuan. According to China Fertilizer Network, the prices for urea shipped from Shanxi to Hubei remain at…… ； In the Anhui region, the mainstream factory prices have increased by 20 yuan, reaching 1700–1720 yuan; the actual transaction price at the factory remains unchanged…… ； In the Jiangsu region, the mainstream factory prices for high-end models are 10 yuan lower, at 1750–1770 yuan ； The volume of goods from other provinces arriving in Hubei has increased slightly; the prevailing ex-plant price for urea in that region remains stable at around 1,700 yuan, and companies are no longer restricting new orders ； In the Shaanxi region, the prices for new orders at high levels are relatively average; as a result, the standard factory prices have dropped by 20 yuan, to between 1700–1720 yuan. The prices for shipments outside this region have also decreased…… ； The demand for goods in the lower reaches of Gansu region is good; manufacturers have low workload and a large number of orders pending shipment. The mainstream factory prices have increased by 70–100 yuan, reaching around 1,550 yuan ； The export situation in Sichuan remains favorable, though domestic sales have slowed down; as a result, the mainstream factory prices remain stable at 1700–1730 yuan ； The situation regarding the export of urea from Chongqing to the southeast region remains favorable, with mainstream factory prices rising by 20 yuan to 1,760 yuan ； The situation regarding the export of fertilizer by rail in Xinjiang has continued to improve recently; the amount of urea exported from the region each day accounts for 40-50% of Xinjiang’s total urea production. However, according to local manufacturers, the pace of purchases in the Guangdong and Guangxi regions has slowed down slightly, and sales within the region are even weaker as the end of the year approaches. As a result, the standard export price for urea from Xinjiang remains stable at 1200-1250 yuan per unit ； The mainstream ex-plant price in Inner Mongolia remains stable at 1,450 yuan; the actual price at the time of sale is... Meanwhile, the price for delivery to the Northeast region has risen to around 1,800 yuan ； A large factory in Heilongjiang has finally resumed production; the mainstream ex-factory price ranges from 1,650 to 1,680 yuan. A factory in Jilin that had been shut down for a long time has started producing products again, though no price has been set yet. The sales situation for urea manufacturers in Liaoning remains stable, with the mainstream ex-factory price staying between 1,610 and 1,640 yuan. Regarding large particles, new orders in Shandong have slowed down, and the mainstream ex-factory prices have dropped by 50 yuan, ranging from 1730 to 1780 yuan ； The mainstream ex-factory prices in Shanxi have stabilized at 1,550–1,620 yuan ； The sales situation in Inner Mongolia has improved slightly, with the main factory prices rising by 60 yuan to 1480–1550 yuan at the lower end ； A major factory in Heilongjiang has offered a price range of 1,840–1,880 yuan for delivery to nearby stations. International urea prices have risen across the board. Overall, as the haze weather subsides, environmental pressure decreases, and the operating rate in the industrial compound fertilizer sector sees a significant increase (the national operating rate for compound fertilizers rose by 8 percentage points from last week to around 70%). The operating rate in the urea industry also increased considerably due to the reduction in haze (rising by about 3 percentage points from the end of last week to…). As the year draws to a close, demand from other industries tends to slow down, and enthusiasm for preparing fertilizers for agriculture remains low; overall, new orders are modest. It is expected that urea prices will remain stable before the Spring Festival, with only slight fluctuations. A few companies might lower prices slightly in an attempt to secure new orders, but after the Spring Festival, as agricultural demand starts to pick up again, urea prices are likely to rise once more.