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Urea prices are rising sharply, with a dominance akin to that of ***. Author/Source: China Fertilizer Network. Date: August 10, 2020. Clicks: 4. Since last Saturday, when India launched another tender, and Algeria’s annual import tender for urea was also held, domestic urea prices have started to rise rapidly. Currently, the standard ex-factory price of urea in Shandong is 1,740–1,760 yuan per ton. In Linyi, compound fertilizer manufacturers are purchasing urea at 1,750–1,770 yuan per ton. In Hebei, the standard ex-factory price is 1,760 yuan per ton, while in Henan it’s 1,720–1,730 yuan per ton. In Shanxi, the standard ex-factory price is 1,640 yuan per ton, with larger-grained urea costing 1,680 yuan per ton. In just one week, and despite the fact that it’s normally a slow season for urea sales, prices have risen by over 100 yuan. In some companies in Shandong, urea prices were raised several times in a single day; some companies even stopped providing quotes and stopping acceptance of payments. The urea market isn’t in a slow season at all – although some companies still purchase urea due to mandatory demands – but the pace of these price increases is quite intense. There are several reasons behind this rapid rise in urea prices: First, there is a continuous increase in demand from international markets. Within half a month, demand in the Indian market remained strong, with tenders being issued on three occasions. After the last tender was concluded last Friday, India launched another one the following day. Earlier, there were rumors in the international market that India had a demand gap of up to 2 million tons, but after those two tenders, the gap did not exceed 1 million tons. With continuous tenders being issued, India’s buyer’s market finds itself in a relatively passive position, while international prices are rising ； This week, Algeria’s annual urea tender was also launched; the quantity called for in this annual tender is 1 million tons. Recently, the FOB price for large-grain urea exports from China was 270 dollars, which translates to a port arrival price of over 1,800 yuan. Driven by this, the ex-plant price of large-grain urea in Shanxi region has also risen to 1,720 yuan. Taking all these factors into account, international demand is currently above 2 million tons, and prices in the international market are high. Even though domestic demand is relatively weak, companies have received many orders to ship goods to ports, so there is no supply pressure in the short term. Secondly, the release of urea supply has been relatively slow recently. Although some enterprises that had been shut down for a long time have resumed production recently, the facilities of some other enterprises remain shut down. According to statistics from China Fertilizer Network, the current daily production volume of urea across the country is around 160,000 tons. Since most enterprises are currently focusing on meeting export orders and the supply volume is relatively low, there is a short-term shortage of urea to meet these export orders. As a result, even though the domestic demand for urea is limited at present, downstream factories still have essential needs, which is driving up the prices of urea. In summary, the domestic urea market has seen its prices continue to rise recently, driven by international market trends; the price increase has also occurred in the Northeast region as a result of these adjustments. However, since the factors contributing to this positive trend are relatively limited, some downstream markets remain cautious. Overall, during the period when companies are exporting urea, its overall price is unlikely to fall, and there are still signs of further increases. After exports cease, however, prices might decline, so caution is still necessary when predicting the market situation in the future. (Wu Wenchao)