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Raising urea prices is quite difficult; it’s even harder to find positive factors in the market _ Author/Source: China Fertilizer Network Date: 2020-07-15 Clicks: 8 In mid-July, the climate in various regions showed distinct summer characteristics, with hot and rainy weather occurring frequently. Although the weather conditions are unpredictable, the fertilizer market remains relatively calm; the longer a new market phase lasts, the more time there is for market sentiment to develop. At present, it is only the urea market that continues to experience fluctuations; in particular, recently the decline in prices has not been significant, and there are few opportunities for price increases. Just like the overall market, it is difficult to find any positive developments. In some areas, the price of urea remains stable for now. There is still demand from domestic agricultural uses, and a new round of tenders in India is upcoming; however, there is no significant support elsewhere. Market participants generally have a pessimistic outlook regarding the future price of urea. As for when there will be widespread price cuts, it remains to be seen. At least for now, some factories are looking for opportunities to raise prices slightly, but they lack the motivation to do so. Similarly, the market for finished fertilizers in autumn is also facing difficulties; the price of compound fertilizers remains stagnant, while the market for water-soluble fertilizers is somewhat weak. First, the actual transaction price has declined. Generally speaking, water-soluble fertilizer companies list relatively high prices, mainly to enhance their brand competitiveness and leave room for negotiation when closing deals; the actual price paid often differs from the listed price. Recently, the actual transaction prices of water-soluble fertilizers have shown a downward trend. One reason for this is the decrease in costs; the market conditions for raw materials are weak. Affected by various factors such as over-supply and low demand, prices are expected to decline in the future, as the cost support provided by raw materials for water-soluble fertilizers has weakened ； The second reason is the outbreak of a \"price war.\" Similar to compound fertilizers, the competition in the water-soluble fertilizer market is quite fierce at present, with a variety of promotional offers aimed primarily at reducing prices in order to attract customers and increase market share. Secondly, the short season leads to insufficient demand. This year, the water-soluble fertilizer market has shown two characteristics: a short growing season and insufficient demand. Recently, trading of water-soluble fertilizers in the northwest region has gradually declined. In previous years, this trend persisted until around September, but this year it ended more than a month earlier, mainly due to a reduction in seasonal demand in the area; both the overall demand and the enthusiasm of end-users for using such fertilizers are lower than in previous years ； Additionally, demand is weak in many areas. Apart from low prices for cash crops, natural disasters also have a significant impact; for example, the floods that occurred recently in Jiangxi, Hubei and other places not only damaged farmland but also destroyed homes in some cases. It is evident that there is an expectation of a decline in agricultural demand in the future. Finally, the outlook for the upstream and downstream markets is pessimistic. In fact, the level of prices for compound fertilizers does not play a decisive role in the market. Upstream manufacturers set prices based on their own production costs, while downstream distributors make purchases depending on the season; their main concern is the future trend of prices. If prices are not expected to improve in the future, it will be difficult to drive progress in the market. However, both upstream and downstream parties are generally pessimistic about the fertilizer market this autumn. One reason for this is that fertilizer prices have declined to varying degrees compared to the same period last year, with another drop in prices occurring during the peak season ； The second reason is that the overall market environment has been sluggish this year; whether it’s initial investments or subsequent fertilization, products available at lower prices are more likely to be accepted by downstream users. In summary, in the short term, the fact that urea helps to stabilize prices is the biggest advantage; however, there is a high likelihood of price declines. The autumn market presents difficulties for traditional fertilizers, and although the situation is somewhat better for water-soluble fertilizers, one should not be overly optimistic.