Currently, the supply and demand in China’s urea market are relatively balanced

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Currently, the supply and demand in China’s urea market are relatively balanced. Author/Source: Futures Daily Date: 2019-08-07 Clicks: 1 Recently, a promotion event for the launch of urea futures was held in Zhengzhou, Henan, organized by Guotai Junan Futures. More than 70 representatives from fertilizer companies across the country attended this meeting. On the eve of the launch of urea futures, this meeting provided a platform for communication among spot manufacturers, traders, delivery warehouses, and industry professionals in the futures sector. 　　At the meeting, Tang Feifei, the leading analyst for the urea market at Shandong Zhuochuang Information, provided a review and analysis of the current urea market situation. She said that in recent years, as preferential policies for the domestic urea industry have been phased out, value-added tax rates have been adjusted, and export tariff policies have changed, the supply of urea has first increased and then decreased, and it is now at a state of relative balance between supply and demand. 　　“Agricultural demand is the main demand sector for urea; in recent years it has shown weak growth trends. In 2018, the total agricultural demand was around 31 million tons, representing a 2.7% decline on a year-on-year basis. In recent years, influenced by changes in agricultural fertilizer practices*, demand for large-grained urea has continued to rise, while demand for small-grained urea has generally declined. In terms of industrial demand, there is an increasing need for urea in the production of melamine. In 2018, the melamine production capacity was 2.2 million tons, with a production volume of 1.29 million tons; the total amount of urea used that year was 3.87 million tons, representing a 10.3% increase compared to the previous year. From January to June this year, the production of melamine was 686,500 tons, an increase of 12.41% on a year-on-year basis ； With the addition of 470,000 to 490,000 tons of new capacity, the amount of urea consumed will continue to increase. ”She analyzed. 　　“In 2018, the average annual price of urea was 2,011 yuan per ton, with a low point of 1,903 yuan per ton and a high point of 2,156 yuan per ton. Volatility in market prices has been high this year; it is estimated that the price of small-grained urea will fluctuate between 1,700 and 2,200 yuan per ton, while the price of large-grained urea will remain below that of small-grained urea for most of the time. ”Tang Feifei said. 　　Relevant officials from the Zhengzhou Commodity Exchange provided information on the current situation of the urea spot market, matters related to the quality inspection and delivery of urea futures, as well as details about the first batch of delivery warehouses. “After the launch of urea futures, relevant companies can learn more and gain a better understanding, and then participate at an appropriate level based on their own circumstances. The exchange will gradually identify some typical cases in the future for the industry to learn from. Urea futures have opened a door for the spot market industry, providing a platform for communication between the industry and financial capital. ”The person said.