Urea price trends across China on September 4

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Urea price trends across China on September 4 Author/Source: Yuege Agri-Materials Website Date: 2019-09-04 Clicks: 21 The domestic urea market continues to show a steady or slightly upward trend. Following recent price increases, purchasing by downstream buyers has slowed down somewhat. Given the weak demand in the country at present, the market may once again enter a period of stagnation and consolidation. The positive developments in the international market are currently only providing psychological support to the market trends; they have not yet translated into concrete effects, which is why the market remains cautious and on the wait. Currently, with repair companies resuming operations and daily production increasing, the supply situation in the domestic market has once again entered a state of balance between supply and demand; it is expected that prices will fluctuate within a narrow range in the short term. In terms of operating rates, the average operating rate of urea producers is around 61%, with a daily output of approximately 143,000 tons. Looking at the operating conditions in major production areas, this week the operating rate in Shandong Province was about 56%, while in Henan Province it stood at around 69%. On the demand side, affected by air pollution control measures, the operating rates of panel manufacturers remain low. Compound fertilizer producers place small orders based on actual needs, generally adopting a cautious and wait-and-see attitude. In the agricultural sector, it is currently the off-season for agricultural demand, resulting in limited market demand. However, from mid-to-late September through October, in regions where two cropping seasons per year are practiced, the autumn harvest will be followed by sowing for the next season. This will not only boost sales of compound fertilizers used as base fertilizers but also drive up demand for topdressing 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 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 remain stable with only slight fluctuations in the short term. Next, focus will be on international bidding and developments in downstream project commencement. In Shandong province, the ex-factory price for small 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 is around 1,810–1,820 yuan per ton; prices remain stable for now. In Hebei province, the ex-factory price for small particles is 1,780–1,820 yuan per ton, with prices also remaining stable. In Henan province, the standard ex-factory price for small particles is 1,780–1,830 yuan per ton, and prices remain stable as well. In Anhui province, the standard ex-factory price for small particles is around 1,850–1,870 yuan per ton, with prices stable. The urea production facility of Anhui Quansheng Chemical is operating normally, producing 950 tons per day, with limited inventory available. The factory price for small particles is 1,860 yuan per ton; prices are negotiated on a case-by-case basis. Supplies are mainly provided to the surrounding areas; demand remains modest, with downstream buyers making purchases as needed. In Jiangsu, the prevailing price for small and medium-sized particles is around 1,860–1,900 yuan per ton, with prices remaining stable for now. In Shanxi, the price for large and small particles is approximately 1,690–1,720 yuan per ton; some companies have raised their prices by 20 yuan per ton. In Inner Mongolia, the prevailing selling price for small and medium-sized particles is around 1,520–1,560 yuan per ton, with prices stable. In Hubei, the price for small particles is 1,830–1,850 yuan per ton, again with prices stable. In Shaanxi, the local selling price for small and medium-sized particles is 1,750–1,770 yuan per ton, while the price for products sold externally is 1,740 yuan per ton; a few companies have raised their prices by 40 yuan per ton. The urea production facility in Shaanxi is operating at full capacity, with a daily output of around 3,500 tons. The reference ex-works price locally is 1,756 yuan per ton, while the export price is 1,703 yuan per ton. Contracts are currently being processed and shipped. Shipments within the province are moderate; most goods are dispatched to regions such as East China, Central China, and South China. New orders will be handled based on demand, and the transaction price is negotiable. In the Guangxi region, the mainstream wholesale price for small and medium-sized granules remains stable at around 1,930 yuan per ton. In Sichuan, the reference price for these granules at the factory level is 1,780–1,860 yuan per ton, also stable. In Guangdong, the mainstream wholesale price for small granules is 1,980–1,990 yuan per ton, with no changes. In Xinjiang, the transaction price at the factory level is 1,400–1,480 yuan per ton, remaining stable. In Jilin, the reference price for small granule urea is 2,000 yuan per ton, stable as well. In Heilongjiang, the transaction price for small granule urea produced by local manufacturers is 1,700 yuan per ton, stable. In Liaoning, the freight cost for small granule urea by road is 1,760–1,840 yuan per ton, with the actual transaction price subject to negotiation; this price remains stable as well. Positive developments in the international market indeed provide support, and the fact that some companies have shifted their production to liquid ammonia also serves as a factor of support. However, these are only short-term advantages. Given the environmental regulations and the production restrictions imposed during the National Day celebrations, not only do urea manufacturers suffer, but downstream enterprises are also greatly affected. Demand will thus remain the biggest obstacle to a recovery in urea prices. At present, strong demand helps to limit price increases for urea. It is expected that the domestic urea market will remain relatively stable in the short term; in the future, attention should be paid to the operating status of urea production facilities and terminal demand.