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Urea prices fluctuate; there are too many price adjustments. Author/Source: China Fertilizer Network. Date: 2020-07-02. Clicks: 6. After the Dragon Boat Festival, urea prices in Shandong, the Two Rivers region, Shanxi, and Shaanxi have increased to varying degrees. At present, the standard ex-factory price of urea in Shandong is 1580–1600 yuan per ton. In Linyi, companies that produce compound fertilizers have raised the price they pay for urea to around 1640 yuan per ton. In the Two Rivers region, the ex-factory price of urea has increased by 20–40 yuan compared to before the Dragon Boat Festival. In Yuncheng, Shanxi, the price of small-grained urea is 1540 yuan per ton when shipped by truck, while large-grained urea costs 1510 yuan per ton； However, prices have also dropped in some areas. For example, the standard ex-factory price of urea in Inner Mongolia is approaching 1,420 yuan, while in Liaoning it ranges from 1,590 to 1,640 yuan. In Xinjiang, the local sales price of urea has fallen to around 1,350 yuan. Companies are under increasing sales pressure and thus export urea in moderate quantities; the ex-factory price for such exports is less than 1,200 yuan. The situation regarding urea in the southwest region is also relatively poor – in Guizhou, some large manufacturers sell urea at an ex-factory price of 1,710 yuan, while in Sichuan the ex-factory price remains below 1,600 yuan. The demand for high-nitrogen fertilizers during the summer has basically come to an end, so price cuts in various regions are understandable. But what is the reason for price increases in some areas? First, local market demand begins to pick up. It is reported that during the Dragon Boat Festival, the demand for top-dressing of crops in the Central Plains region begins to rise. Supported by this demand, local urea manufacturers have raised their prices slightly. Although prices had dropped to some extent earlier on, driven by strong demand, some factories have stopped the decline in prices and seen an increase in new orders. Some industry insiders say that starting from mid-July, top-dressing of corn in areas such as the two rivers regions in Shandong will also begin, meaning there is still potential demand in the future, and the market conditions in regions like Jiangsu and Anhui may also gradually improve. Secondly, overall construction activity in the regions where demand has picked up has declined. Recently, due to high temperatures and the prolonged operation of equipment, some urea manufacturers plan to restrict production voluntarily or involuntarily in June and July. Although some companies have resumed production recently, the overall daily output of urea remains at around 150,000 tons; as a result, the overall supply pressure is relatively low, allowing prices to be increased slightly. Finally, there are many items available at low prices. This price increase became evident even before the Dragon Boat Festival; in some factories in Shanxi and Shaanxi, the large volume of orders received at low prices led to an ample supply in the short term, prompting an appropriate raise in prices. If downstream customers are willing to pay the higher prices, goods can be supplied and shipped on a priority basis, allowing these companies to gain a relative advantage – and this move clearly has the intent of driving up prices. In summary, although this price increase is supported by demand, that demand is short-lived and the area where fertilizer is used is relatively small. Prices in Inner Mongolia have continued to fall in recent times; even though urea prices remain stable in areas such as the two rivers regions in Shandong, they are still under pressure from cheaper supply. It is expected that urea prices will continue to drop in the future. Additionally, as supply increases, it is likely that the price increases in some regions will not last long. (Wu Wenchao)