Weekly Urea Market Report for the Third Week of January 2017

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Weekly Report on the Urea Market for the Third Week of January Author/Source: China Fertilizer Network Date: 2017-01-22 Clicks: 9 As the Spring Festival approaches, new orders for urea have slowed down; prices were weak in many areas during the first two days of this week, with prices in some regions experiencing a slight decline； By this Thursday, as agricultural demand is set to increase after the New Year in some areas, a very small number of dealers have started purchasing urea, which has led to a slight increase in prices for lower-quality products. In a few regions such as Hubei, Gansu, Yunnan, and Guangxi, the supply of urea remains relatively tight, and the prevailing ex-factory prices have risen once again. According to statistics from China Fertilizer Network, the operating rate of urea production facilities is continuing to rise; some urea manufacturers are set to resume operations or plan to do so after the Spring Festival, which should lead to an increase in the supply of urea in the market. Compared to last weekend, the operating rate of urea producers in Shandong Province has rebounded... (The omitted parts can be found in the members’ area; the same applies below.) Industrial purchases have slowed down somewhat. Initially, the prevailing ex-factory prices declined; however, due to a slight improvement in agricultural demand, they rose again to 1,660–1,700 yuan per ton (same unit below). In Linyi, the purchase price also dropped by 30 yuan before rising once more…… ； In the Hebei region, the mainstream ex-factory prices have increased by 40 yuan, reaching 1660–1700 yuan; the main reason for this is that some manufacturers intend to build up their inventory for sale after the New Year ； In the Henan region, transportation is strained due to the approaching Spring Festival. However, some manufacturers have a large number of orders pending shipment; the mainstream factory prices have stabilized at 1660–1700 yuan, with individual shipments costing more…… ； The situation regarding the export of firewood in Shanxi region is fairly average; there are a large number of orders awaiting shipment, and the mainstream factory prices have increased by 30 yuan, ranging from 1550 to 1650 yuan ； The urea market in regions such as Jiangsu and Anhui is weak**, with stable prices ； As the Spring Festival approaches, the arrival of urea shipments from other provinces has decreased; urea manufacturers in Gansu Province still operate at low capacity levels, resulting in a tight market supply. The main factory prices have risen by 40–120 yuan, reaching 1590–1670 yuan, though actual transaction prices are slightly lower ； Quotations in Sichuan and Chongqing remain stable for now ； The prevailing offering price in Yunnan is around 1,900 yuan; a major local manufacturer has finally resumed production ； Two urea plants in Guangxi are operating at reduced capacity, leading to a tight supply in the market; mainstream ex-plant prices have risen by 30–50 yuan to 1,980–2,000 yuan ； In the Xinjiang region, logistics are hindered due to the approaching Spring Festival, resulting in average sales performance locally. However, most companies are looking forward to the market situation after the Spring Festival, and logistics conditions are expected to improve gradually; as a result, the prevailing ex-factory prices remain stable at 1200–1250 yuan ； The mainstream ex-factory prices in Inner Mongolia remain around 1,450 yuan; sales of lower-end products have decreased. The price upon arrival in the Northeast region for shipments there is around 1,800 yuan ； The urea market in the Northeast region has seen little change; the standard ex-factory prices in Heilongjiang remain at 1650–1680 yuan. A major manufacturer in Jilin has announced its official prices, with the standard ex-factory price ranging from 1650 to 1700 yuan. Subsequently, due to the production of a new type of urea, there was again a shortage of stock available. In Liaoning, the standard ex-factory prices remain at 1610–1640 yuan. Regarding large-grain products, the mainstream prices in Shandong region have dropped by 20 yuan, ranging from 1730 to 1760 yuan ； The mainstream ex-factory prices in Hebei region have stabilized at 1,740–1,780 yuan ； The mainstream prices in Shanxi have increased by 30 yuan, reaching 1550–1650 yuan ； Manufacturers in Inner Mongolia have a large number of orders pending shipment, and the standard factory prices have increased by 10–20 yuan, reaching 1500–1560 yuan. International urea prices have risen, with only very slight declines in a few cases. Overall, as the Spring Festival approaches, production by industrial compound fertilizer manufacturers has slowed down, with their operational rates dropping significantly (the national operational rate for compound fertilizers fell by 9 percentage points compared to last week, to around 61%). The situation regarding new agricultural orders remains poor in many areas, while the operational rate in the urea industry continues to rise (by about 3 percentage points compared to the end of last week, to……) ； However, agricultural purchases have already begun in some areas, and with fog and haze becoming severe once again in certain regions, new rounds of environmental inspections are likely to take place. As a result, the operating rate of urea production facilities is unlikely to increase quickly. It is expected that urea prices will remain stable before the Spring Festival, with only slight fluctuations in some areas. But after the Spring Festival, as demand from the agricultural sector picks up, urea prices are likely to rise again.