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The off-season market has begun; various strategies are being employed for urea sales. Author/Source: China Fertilizer Network. Date: July 9, 2019. Page views: 13. Recently, the demand for summer fertilizers has gradually tapered off in many regions, and the need for topdressing has also subsided. Although there is still some demand for urea in certain areas, it is insufficient to drive a general increase in urea prices. Recently, urea prices have seen a certain degree of decline across various regions. Currently, the prevailing ex-factory prices for urea in Shandong Province range from 1,890 to 1,910 yuan per ton. In Linyi, compound fertilizer manufacturers are purchasing urea at prices between 1,930 and 1,950 yuan per ton. In Hebei Province, the typical ex-factory price is between 1,870 and 1,920 yuan per ton; in Henan Province, it stands at 1,910 yuan per ton. In Shanxi Province, the standard ex-factory price is 1,795 yuan per ton, while that for large-particle urea is 1,790 yuan per ton. Meanwhile, due to ongoing market demand in regions such as Jiangsu, Anhui, and Xinjiang, local urea prices remain relatively high, with slight upward adjustments observed in some areas. Since the autumn market has not yet begun, players in all segments of the urea industry are employing various tactics to mitigate risks or increase profits. Below is a brief overview of the strategies adopted by these sectors in the domestic urea off-season market. India’s tender: “Sima Zhao’s intentions are obvious to everyone.” What has caught the attention of many in the industry recently is India’s fourth tender for urea this year. According to the latest international data, the total amount bid for this tender in India is 2.8 million tons, with the amount awarded likely to be around 1.9 million tons. China plans to supply approximately 1 million tons of urea, but at a relatively low price; the price at China’s ports is estimated to be around 1,800 yuan per ton at most. By issuing this tender during the off-season for urea use in China, India’s intention is clear: to purchase urea at the lowest possible cost in order to gain an advantage. Some in the industry suggest that it isn’t out of the question for India to cancel this tender and issue one again. Domestically, downstream players are “sitting on the sidelines, making cautious purchases, and reducing risks”. On one hand, domestic market demand is currently in a slow season; with weak demand, downstream traders and compound fertilizer manufacturers see no need to make large-scale purchases. In fact, some downstream players have already taken short positions on urea to mitigate risks, cleared their inventories, and are waiting for the next peak season for fertilizer use before planning any further purchases. On the other hand, inventory levels in certain downstream markets remain high, and with ongoing arrivals of futures supplies, these stocks should be sufficient until the end of this month. Given that the urea market is currently volatile, there are no plans for substantial purchases at present. Urea producers “harm the enemy by 800 units, but damage themselves by 1,000 units”. Even before the bidding process for urea in India began, overall urea prices rose slightly, in line with the principle that prices increase whenever there is a bidding process. However, after the bidding concluded, urea prices dropped again. Given the current high supply level of urea by manufacturers (according to China Fertilizer Network, as of this Friday, the national production volume of urea was still above 150,000 tons), and in order to meet the annual urea production targets, most urea manufacturers do not plan to carry out any major maintenance activities in the near future. Therefore, the relatively low-priced exports resulting from the recent bidding processes in India are a necessary measure in such circumstances. In summary, overall demand for urea has been weak recently, and prices are likely to decline in the coming period, especially after mid-July when demand in Xinjiang fades; low-priced supplies from there could impact domestic market prices. (Wu Wenchao)