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Urea price trends across China on September 3 Author/Source: Yuege Agri-Materials Network Date: 2019-09-03 Clicks: 28 The domestic urea market continues to see price increases. As urea prices declined in the earlier period, sales of lower-priced products by some manufacturers increased significantly, reducing their inventory pressures. Meanwhile, recent maintenance work or production cuts at certain facilities, along with expectations of increased exports in September, have motivated manufacturers to hold steady prices. Today, some manufacturers in Shandong, Hebei, Henan, Jiangsu, Anhui, Shanxi and other regions have raised their prices by around 10–30 yuan per ton. In terms of production capacity, the average operating rate of urea manufacturers dropped to around 61%, with daily production falling to about 143,000 tons, a decrease compared to the previous week. Looking at the production levels in the main production areas, operations in Shandong were at around 56% this week, while those in Henan were at around 69%. On the demand side, due to efforts to control air pollution, the operating rates of sheet manufacturing enterprises are low. Compost fertilizer manufacturers handle orders on a small scale as needed, adopting a cautious approach. In the agricultural sector, it is currently the off-season for farming activities, so market demand is limited. From mid-to-late September to around October, the autumn harvest takes place in regions with two growing seasons per year, and the sales of base compost fertilizers also contribute to an increase in demand for top-dressing and supplementary fertilizers. On the international front, there are slight signs of improvement recently: Ethiopia has issued a tender for 600,000 tons per year, Bangladesh has issued tenders for 100,000 tons each for both large and small quantities, and India is likely to issue new tenders in September. There are positive prospects for the export of urea in the domestic market as well. It is expected that the domestic urea market will see price increases in the short term. Supported by factors such as reduced supply, news of new international tenders, and other positive developments, market sentiment improved. Urea manufacturers in key production areas such as Shandong saw an improvement in their cash inflows and less sales pressure, which led them to raise their prices; as a result, transaction prices increased slightly. The short-term market is relatively optimistic. In Shandong region, the ex-factory price for small and medium-sized particles is 1,780–1,850 yuan per ton. In the Linyi market, the transaction price is around 1,840 yuan per ton, while in the Heze market it ranges from 1,810 to 1,820 yuan per ton. Some companies have raised their prices by 10–20 yuan per ton. In Hebei region, the ex-factory price for small particles is 1,780–1,820 yuan per ton, with some companies increasing their prices by 20 yuan per ton. In Henan region, the typical ex-factory price for small particles is 1,780–1,830 yuan per ton, with some companies raising their prices by 10–30 yuan per ton. In Anhui region, the typical ex-factory price for small particles is around 1,850–1,870 yuan per ton, with some companies increasing their prices by 10–20 yuan per ton. In Jiangsu region, the typical price for small and medium-sized particles is around 1,860–1,900 yuan per ton, with some companies raising their prices by 20 yuan per ton. In Shanxi region, the price for large and small particles is around 1,690–1,700 yuan per ton, with some companies increasing their prices by 10 yuan per ton. In Inner Mongolia region, the typical transaction price for small and medium-sized particles is around 1,520–1,560 yuan per ton, with prices remaining stable. In Hubei region, the typical price for small particles is 1,830–1,850 yuan per ton, with some companies increasing their prices by 20 yuan per ton. In Shaanxi region, the typical local sales price for small and medium-sized particles is 1,750–1,770 yuan per ton, while the price for shipments outside the region is around 1,680 yuan per ton, with prices remaining stable for now. In Guangxi region, the typical wholesale price for small and medium-sized particles is around 1,930 yuan per ton, with a price increase of 10 yuan per ton. In Sichuan region, the ex-factory price for small and medium-sized particles is around 1,780–1,860 yuan per ton, with prices remaining stable for now. In Guangdong region, the typical wholesale price for small particles is 1,980–1,990 yuan per ton, with a price increase of 10 yuan per ton. In Xinjiang region, the ex-factory transaction price is around 1,400–1,480 yuan per ton, with prices remaining stable. In Jilin region, the price for small urea particles produced there is around 2,000 yuan per ton, with prices remaining stable. In Heilongjiang region, the transaction price for small urea particles produced locally is around 1,700 yuan per ton, with prices remaining stable. In Liaoning region, the price for small urea particles transported by truck is around 1,760–1,840 yuan per ton, with prices negotiable; overall, prices remain stable. Urea manufacturers are either undergoing maintenance or switching to the production of liquid ammonia, which has led to a slight decrease in supply. Additionally, there is some fertilizer preparation in northern Jiangsu and Anhui, prompting purchases from surrounding areas. Traders are buying at lower prices, and demand for low-cost supplies is increasing. There is also hope for exports, which contributes to slight price increases. However, compound fertilizer and plywood manufacturers are waiting to see how things develop, so demand remains cautious. The need for urea limits further price increases. It is expected that urea prices will remain stable in the near term, with only slight improvements in certain areas. It is important to keep an eye on international bidding trends and domestic environmental regulations. On the supply side, multiple factories in Inner Mongolia and Shaanxi are still under maintenance, keeping the daily production level below 150,000 tons. On the demand side, the operating rates of downstream industries in Shandong have seen a recovery; port trade in Hebei is active, factories along the rivers continue to receive export orders, inventory levels in the south are low, and spot transactions are performing well. The demand for procurement from international markets is gradually increasing, and coupled with expectations of label printing, this provides support for the domestic market. As there is a certain level of inventory in the factories, prices are expected to remain strong in the short term. Close attention will still be needed to monitor any changes in industrial production activities around Beijing in mid-September.