Urea price trends across China on May 8

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Urea price trends across China on May 8 Author/Source: Yuege Agri Supplies Network Date: 2020-05-08 Clicks: 11 The domestic urea market remains weak; trading activity has declined, downstream buyers lack confidence and are less inclined to make purchases. Manufacturers have largely fulfilled their orders for the May Day holiday, and there is currently little interest in new orders, resulting in increased pressure on companies to secure sales. In terms of demand, industrial compound fertilizer and panel manufacturers tend to make purchases in moderation when prices are low. In the agricultural sector, demand is low in many areas during the off-season, and purchases are scattered, providing limited support for the market. On the international front, Indian MMTC issued a new round of tenders on May 1; the bidding deadline is May 7, 2020, with delivery scheduled for June 15, 2020. It is expected that the volume of material called for in these tenders will exceed 1 million tons. However, given the weak international prices, the support this could provide for domestic trade is likely to be limited. It is expected that the domestic urea market will remain stable but weak in the short term; ongoing attention should be paid to plant operations and bidding activities in India. Hualu Hengsheng: medium-sized particles at 1600 (stable), large-sized particles at 1760 (20% decrease); Hebei Dongguang: small-sized particles at 1630 (stable), large-sized particles at 1800 (stable); Henan Xinlianxin: 1660 (stable); Shanxi Fengxi: 1560 (stable); Jiangsu Linggu: 1750 (stable); Anhui Haoyuan: 1700 (stable); Inner Mongolia Boda: 1450 (20% decrease); Shaanxi Shanhua’s direct sales: 1626 (stable); Xinjiang Yankuang: 1360 (stable). The urea production plant in Henan Jin Kai operates at a stable load, with a daily output of around 4,200 tons. The reference price for large and medium-sized particles at the factory is 1,670 yuan per ton; the price can be negotiated upon completion of the transaction. Execution is mainly focused on advance orders, with most going to the industrial sector; new orders are moderate in volume. Recently, the mainstream ex-factory prices of surrounding enterprises are around 1,620–1,630 yuan per ton. In the Shandong region, the ex-factory price for small and medium-sized particles is 1,600–1,700 yuan per ton; the prevailing transaction price is around 1,600–1,620 yuan per ton. In the Linyi area, the market price for such particles is 1,690–1,700 yuan per ton, while in the Heze area it’s around 1,680–1,690 yuan per ton. Some companies offer prices 10 yuan lower per ton. In the Hebei region, the ex-factory price for small particles is around 1,630–1,650 yuan per ton, with the prevailing transaction price at around 1,610–1,620 yuan per ton. The ex-factory price for large particles is around 1,800 yuan per ton, with prices remaining stable for now. In the Henan region, the ex-factory price for small and medium-sized particles is 1,660–1,700 yuan per ton, while the prevailing transaction price is around 1,620–1,630 yuan per ton; prices remain stable. In the Anhui region, the ex-factory price for small particles is around 1,710–1,760 yuan per ton, with prices remaining stable. In the Jiangsu region, the prevailing price for small and medium-sized particles is around 1,680–1,740 yuan per ton, with prices remaining stable. In the Shanxi region, the export price for small particles is around 1,540–1,590 yuan per ton, while the price for large particles for new orders is around 1,570–1,590 yuan per ton; prices remain stable. In the Inner Mongolia region, the prevailing export price for small and medium-sized particles is around 1,450–1,550 yuan per ton, while the price for large particles is around 1,580 yuan per ton; prices remain stable. In the Hubei region, the ex-factory price for small particles is around 1,700–1,720 yuan per ton, with prices remaining stable. In the Shaanxi region, the local selling price for small and medium-sized particles is around 1,620 yuan per ton, with prices remaining stable. In the Guangxi region, the prevailing wholesale price for small and medium-sized particles is around 1,800–1,820 yuan per ton, with prices remaining stable. In the Sichuan region, the ex-factory price for small and medium-sized particles is around 1,690–1,740 yuan per ton, with prices remaining stable. In the Guangdong region, the prevailing wholesale price for small particles is around 1,820–1,830 yuan per ton, with prices remaining stable. In the Xinjiang region, the transaction price at the factory is around 1,380–1,470 yuan per ton, with some companies offering prices 30 yuan lower per ton. In the Jilin region, the transaction price for small particle urea is around 1,700–1,740 yuan per ton. Quotations remain stable. The transaction price for small-grained urea in Heilongjiang is around 1,660 yuan per ton; some companies are offering prices 40 yuan per ton lower. In Liaoning, the freight-cost adjusted price for small-grained urea ranges from 1,660 to 1,720 yuan per ton, with the actual transaction price subject to negotiation. Quotations remain stable. In China, most regions are in the off-season for fertilizer use, resulting in low demand for agricultural urea, as well as limited demand from industrial sectors. On the export side, India’s bidding deadline was today; however, given that the prices are much lower than current domestic prices, this round of bidding will again result in no profits. Yuege Agricultural Inputs Network expects the domestic urea market to remain weak and stagnant in the short term. In Shandong, Henan, and Hebei, the prices of some mainstream products have dropped below 1,600 yuan per ton. In Shanxi and Shaanxi, prices have fallen by 30–50 yuan per ton compared to before the holiday, and the situation regarding order intake remains poor. On the demand side, the collection amount for compound fertilizers in the second round was lower than that of the same period last year. Under the current circumstances, industrial users purchase these fertilizers as they need them, and they are cautiously pessimistic about future market trends. In the agricultural sector, the market is currently in a period where production in the north has ceased while that in the south has not yet fully started; as a result, agricultural demand provides limited support for the market. The bidding deadline is this evening; market forecasts suggest that the price in terms of FOB China will be around 220–225 USD per ton. It is very difficult to export goods sourced domestically. Overall, prices are expected to remain slightly lower in the short term.