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Urea price trends across China on March 23 Author/Source: Yuege Agri Supplies Network Date: 2020-03-23 Clicks: 45 Prices in the market continued to decline overall, with significant pressure to sell. Factories reduced their prices significantly in an effort to make sales; the low-end prices of factories in the northwest are now roughly on par with those in the south, and sales conditions have improved slightly. In the North China region, there remains a stalemate between upstream and downstream manufacturers – upstream factories are determined to hold their prices, while downstream manufacturers purchase in small quantities due to essential needs. In the Northeast, there is widespread selling of spot goods, resulting in chaotic price levels. In major production areas such as Shandong, the ex-factory prices of small and medium-sized particles have seen a reduction of 30–50 yuan per ton, while in Shanxi the price cut for large particles is larger, at 50–60 yuan. The ex-factory prices in Shandong and the Two Rivers regions have been reduced to 1,750–1,780 yuan per ton, while the reference price for actual transactions is 1,720–1,740 yuan per ton. Apart from the continued strong demand for urea for agricultural use in Xinjiang, the preparation of fertilizers for spring plowing has largely been completed in other regions, resulting in a weak overall agricultural demand across the country. The demand from compound fertilizer factories and industries such as those that use rubber sheets is fairly decent, but given the current sluggish market conditions, there is little enthusiasm for purchasing, with purchases generally being made only as needed. Most urea manufacturers rely on receiving orders in advance; under the pressure of poor revenue from new orders, prices may continue to fall. The prevailing ex-plant prices of small-grained urea in the Shandong region have seen a slight decline: Ruixing Chemical quotes 1,750 yuan per ton, with a slight drop of 30 yuan per ton; Mingshui Chemical quotes 1,830 yuan per ton, with prices remaining stable for now; Yangmei Pingyuan quotes 1,760 yuan per ton, also with stable prices at present. Overall, the ex-plant price of urea in Shandong region declined slightly today, with actual transaction prices determined through negotiation. The urea production equipment at Yangmei Pingyuan Chemical Co., Ltd. is operating normally. Small-particle urea costs 1,760 yuan per ton, with prices remaining stable for now. The enthusiasm for purchasing downstream is moderate, and the supply of urea is normal. The urea production equipment at Shandong Jinmei Mingshui Chemical Group Co., Ltd. is operating normally, with a daily production capacity of around 1,200 tons. The price of small-particle urea is 1,830 yuan per ton; this price remains stable for now, while the actual transaction price is determined through negotiation. Shandong Ruixing Chemical Co., Ltd. has an annual urea production capacity of 1.6 million tons, and at present its daily production is around 4,000 tons. The spot price for small-particle urea is 1,750 yuan per ton; the quote has seen a slight decrease of 30 yuan per ton, with the actual transaction price being determined through negotiation. The enthusiasm for purchasing downstream is moderate, and the supply of urea is normal. The imbalance between supply and demand, coupled with changes in the international situation, keeps overall sentiment bearish. The market remains focused on the Indian pricing announcement today, but it is said that its release date may be postponed further, and India will implement quarantine measures upon arrival, which will increase suppliers’ costs. Overall, there are no significant positive factors in the short-term market at present. The efforts to address air pollution contamination continue, with overall plant load remaining low; most companies continue to primarily generate power for advance purchase. On the demand side, compound fertilizer manufacturers had sufficient stock of urea available for procurement in the early stage, with weak purchasing intentions; the operating rate of plywood factories has seen a slight increase, while industrial demand has not shown any significant improvement. As environmental regulations ease and weather conditions improve, it is expected that demand from both industrial and agricultural sectors will improve. In the short term, the urea market is likely to remain stable, with only minor fluctuations. Regarding demand, attention should be paid to changes in the operating rates of urea producers, as well as to future purchasing activities in the agricultural and industrial sectors.