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Urea price trends across China on February 28 Author/Source: Yuege Agri-Resources Web Date: 2020-02-28 Clicks: 114 The domestic urea market continued to show an upward trend. In the main domestic markets at present, sales at premium prices have declined compared to earlier periods, with downstream buyers being more cautious. However, manufacturers have an ample amount of pre-paid orders, and shipping conditions are satisfactory; moreover, supply is tight in some market areas, so manufacturers remain determined to maintain high prices. Currently, domestic demand provides decent support; in some areas in the north, supplementary fertilization for wheat is ongoing, while in the rice-growing regions in the south, preparations for fertilization have begun. There is a high level of enthusiasm among end-users for making purchases. On the industrial side, downstream compound fertilizer manufacturers are increasing their production capacity, which leads to higher demand for raw materials. Panel manufacturers are expected to resume operations gradually after March. The domestic urea market is expected to maintain an upward trend in the short term. Recently, the domestic urea market has seen a steady rise with only slight increases. In some areas of North China, the application of top-dressing for wheat is coming to an end, while fertilization preparations have begun in rice-growing regions. Compound fertilizer manufacturers are accelerating their production, industrial users are gradually restocking their supplies, and some companies have continued to raise their prices. It is expected that the domestic urea market will maintain a steady trend with slight upward movements in the short term. The urea production facility of the Shandong Alliance has reduced its capacity, with a daily output of around 2,100 tons (due to minor equipment repairs). The ex-factory price of small particles has risen to 1,760–1,790 yuan per ton, and new orders are seeing improved performance. Spot shipments are primarily used to fulfill surrounding orders, with active demand from farmers for pickup. Recently, the prevailing transaction price for small-particle urea from nearby companies has been around 1,740 yuan per ton. Hualu Hengsheng medium-sized particles are priced at 1740 (a rise of 10); Hebei Dongguang small-sized particles are at 1750 (a rise of 10); Henan Xinlianxin’s products are at 1740 (stable); Shanxi Fengxi’s products are at 1700 (a rise of 20); Jiangsu Linggu’s products are at 1820 (stable); Anhui Haoyuan’s products range from 1750 to 1770 (stable); Inner Mongolia Yiding’s products are at 1640 (stable). Shaanxi Shanhua’s products are sold locally at 1780 (a rise of 20), while those sold externally are at 1720 (a rise of 40). Xinjiang Yankuang’s products are at 1380 (stable). In the Shandong region, the ex-factory price for small and medium-sized particles is 1,760–1,790 yuan per ton; the typical transaction price ranges from 1,710–1,730 yuan per ton. In the Linyi area, the market price for such particles is 1,770–1,780 yuan per ton, while in the Heze area it is around 1,760–1,770 yuan per ton. Some companies have raised their prices by 10 yuan per ton. In the Hebei region, the ex-factory price for small particles is around 1,750–1,760 yuan per ton, with typical transaction prices at around 1,710–1,720 yuan per ton; some companies have increased their prices by 10–20 yuan per ton. In the Henan region, the ex-factory price for small and medium-sized particles is 1,720–1,750 yuan per ton, with some companies raising their prices by 10 yuan per ton. In the Anhui region, the typical ex-factory price for small particles is around 1,740–1,810 yuan per ton, with prices remaining stable for now. In the Jiangsu region, the typical price for small and medium-sized particles is around 1,780–1,810 yuan per ton, also with prices staying stable. In the Shanxi region, the price for small particles for external distribution is around 1,690–1,700 yuan per ton, with some companies raising their prices by 10 yuan per ton. In the Inner Mongolia region, the typical price for small and medium-sized particles for external distribution is around 1,600–1,640 yuan per ton, with some companies increasing their prices by 20–50 yuan per ton. In the Shaanxi region, the local sales price for small and medium-sized particles is around 1,760 yuan per ton, with a price increase of 20 yuan per ton. In the Guangxi region, the typical wholesale price for small particles is around 1,900–1,930 yuan per ton, with some prices rising by 10 yuan per ton. In the Sichuan region, the ex-factory price for small and medium-sized particles is around 1,800–1,910 yuan per ton, with some companies raising their prices by 60 yuan per ton. In the Guangdong region, the typical wholesale price for small particles is around 1,930–1,950 yuan per ton, with prices increasing by 20–30 yuan per ton. In the Xinjiang region, the transaction price at the factory level is around 1,350–1,410 yuan per ton, with prices remaining stable for now. In the Jilin region, the price for small particles containing urea is around 1,750–1,790 yuan per ton. Prices remain stable. The transaction price for small-grained urea in Heilongjiang is around 1750–1800 yuan per ton; prices remain stable as well. The freight cost for small-grained urea in Liaoning is 1720–1770 yuan per ton, with the actual transaction price subject to negotiation. Prices remain stable. Analysis of the urea futures market: The spot urea market has seen a slight increase, with active purchasing of new orders; manufacturers are operating at slightly higher capacity levels, and freight transportation conditions have improved. Currently, the mainstream price in Shandong’s urea market has risen by another 10 yuan per ton, reaching 1,730 yuan per ton. In Henan, the mainstream ex-factory price has increased by 20 yuan, reaching 1,740 yuan per ton. On the supply side, inventory levels dropped by 7.62% this week compared to last week, while the operating rate increased by 5.27%. However, as logistics and transportation conditions improved, various manufacturing companies began to ship goods. On the demand side, plywood factories in Linyi, Heze and other areas are gradually resuming operations. In the agricultural sector, with the arrival of the spring plowing season, purchasing activity is on the rise, and there is high enthusiasm among those at the grassroots level to get involved. Overall, agricultural demand downstream is improving, while industrial demand is recovering slowly. In the futures market, yesterday’s urea 05 contract declined fluctuantly, closing at 1789 points; the basis narrowed to -59, while the 5-9 price spread also shrank to 61. Overall, supply is abundant, and active spring plowing drives demand. Logic: Supply is ample, downstream demand is growing slowly, and inventory pressure remains high. Brief review of the urea market: Prices in Shanxi and Inner Mongolia have risen significantly, while prices at major factories in Shandong, Henan, and Hebei remain relatively stable. New transactions are limited; due to the rapid increase in prices, it is becoming more difficult for downstream users to accept them, so traders are focusing on selling the stock they already have. According to the results of a joint questionnaire survey conducted by the Price Monitoring Center of the National Development and Reform Commission and FeiYiTong, the situation regarding long-distance transportation across the country has improved significantly, but challenges remain in the last mile of delivery; the supply that entered the market earlier has not yet reached all grassroots levels. The production of compound fertilizers is recovering at a rapid pace, but the overall operational rate remains below that of the same period last year. Several gas production enterprises in Inner Mongolia, as well as some production lines that have been shut down in Shanxi, Henan and other regions, have plans to resume operations in the near future; this is expected to help curb the upward trend in prices. In the short term, with the spring plowing season approaching and steady demand remaining, prices are likely to continue to fluctuate within a relatively narrow range.