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Urea falters below 1,700 – How will summer fertilization get underway? Author/Source: Date: 2020-04-20 Clicks: 18 By the end of April, the fertilizer market shifted from a state of intense activity to one of calmness. The demand for fertilizers in spring had come to an end, while demand for summer fertilizers had not yet fully started. As a result, compared to the tight shipping situation in March, the fertilizer market became more stable after the end of April. In particular, demand in the Northeast region was approaching its end. In the Central Plains region, demand for summer fertilizers usually starts around June. Although there is still some time left, preparations for the production of compound fertilizers are already in full swing. So, how will this year’s summer fertilizer market unfold? Firstly, the price of urea has been rising steadily, imposing certain cost pressures on compound fertilizer manufacturers. Generally, the demand for fertilizers in regions such as the Central Plains, Anhui, and Jiangsu peaks in June during the summer. As a field crop, corn requires a large amount of fertilizer. We know that corn fertilizers are mainly high-nitrogen compound fertilizers, such as those with a formula of 40%N (28:6:6). The main ingredient in these fertilizers is urea; therefore, the price trend of urea influences, to some extent, the price trend of high-nitrogen fertilizers in the future. Recently, the price of urea has risen again. If compound fertilizer manufacturers purchase raw materials at this time, then the price of corn fertilizers is likely to remain high in the coming period. Secondly, the price of urea has risen to over 1700; how much more can it increase in the future? Driven by previous tenders in India as well as the renewed demand from compound fertilizer manufacturers and plywood plants in recent times, urea prices have risen. Currently, the prevailing price of small-grain urea in Shandong region is around 1700–1720 yuan per ton, while prices in the southern regions are even higher, with an increase of about 30 yuan per ton compared to April 9th. Agricultural demand has temporarily slowed down, while industrial demand remains steady; shipments are on track, and there is a slight increase in purchases by downstream markets. Enterprise operations remain stable for now. The prevailing ex-factory price of urea in Inner Mongolia is 1510 yuan per ton. This week, some companies have shown signs of raising their prices, with most having orders worth over 10,000 tons each. In summary, companies are inclined to maintain high prices; coupled with an ample supply of orders expected in the near future, although the downstream market is cautious, there are no signs of price declines at present. Once again, urea prices are on an upward trend. So, how will the market for high-nitrogen fertilizers start this year? According to research by China Fertilizer Network, demand in the Northeast region is just coming to an end, while demand for corn fertilizers has already begun to rise in regions such as the Central Plains. Some companies have started collecting payments related to corn fertilizers in advance. Due to issues such as limited transportation, production and supply at many compound fertilizer manufacturers are under strain. Next, these manufacturers will begin preparing for the production of fertilizers needed for the summer season. However, the price of urea, a key raw material, remains unstable and is on the rise. As a result, in the short term, most compound fertilizer manufacturers will purchase materials based on their actual needs. To secure some upfront payments, some of these manufacturers have reduced the prices of their high-nitrogen fertilizers to a certain extent. Finally, most people are pessimistic about the summer fertilizer market in the coming period, as they are not optimistic about an increase in urea prices. However, the situation of fertilizer prices this spring is quite special; if urea prices remain high, then the prices of high-nitrogen fertilizers will also rise. On the other hand, if urea prices rise slightly before falling sharply, then there is still some room for a decline in the prices of high-nitrogen fertilizers. Therefore, the end of April and early May will be a very important critical point.