Thread Content
Every possible measure is being taken; urea prices are unlikely to rise significantly. Author/Source: China Fertilizer Network Date: 2020-04-20 Clicks: 17 First of all, there is relatively high supply pressure. During the same period last year, the total production of urea was only a little over 150,000 tons, while at present the daily actual production volume of urea across the country exceeds 160,000 tons. Moreover, aside from those plants that have temporarily stopped operations, there are relatively few plants scheduled for maintenance at the moment; this means that the supply in the urea market will remain sufficient in the near term ； At least half of these companies have limited inventory capacity, resulting in a relatively high utilization rate of their funds. On the other hand, the prices currently in effect are still above the average cost level for urea manufacturers. Taking all these factors into account, the negative factors affecting urea prices cannot be ignored. As long as normal sales continue, urea prices can remain relatively stable; however, if there are difficulties in selling the product, it is expected that urea prices will decline in the short term. Secondly, the actual hard demand in the market is relatively low. At the current stage, although there is still demand in some areas of the Northeast, and some distributors do not have any inventory left, coupled with the gradual increase in agricultural demand in regions such as Jiangsu and Anhui, as mentioned earlier, the overall supply of urea is relatively high. Moreover, the willingness to pay for urea in regions like the Northeast is relatively low. For the large-grain urea products that are in high demand, the price difference compared to its peak level before the New Year is nearly 300 yuan, which reflects the caution in the market. In the Northeast, where fertilizer use starts relatively late, local traders are also quite cautious, fearing that companies might lower prices due to sales pressure, thereby resulting in losses for those who purchased urea in advance ； The recent market situation for industrial melamine is also relatively sluggish, as demand from the industrial sector is limited. Moreover, there is no urgency to produce high-nitrogen fertilizers using compound fertilizers at this stage. Overall, although there is still some demand in the urea market at present, downstream buyers are cautious; unless there is strong demand driving them, purchases aimed at taking advantage of future market conditions are relatively limited. In summary, urea prices have indeed risen compared to earlier periods, and companies currently have a relatively large supply available for shipment. However, the upward trend has slowed down, and there is even a possibility of a decline. It is expected that until the peak season for the shipment of high-nitrogen fertilizers arrives, urea prices will unlikely see any significant increase.