Rising raw material prices will push urea prices higher

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Under the gas shortage, natural gas urea production companies will inevitably experience pain. The reduction in natural gas supply has led to a decrease in the output of downstream gas head urea companies. Calculated based on the gas supply volume, the overall production of gas head urea companies will drop by about 10%. As production fell, urea prices also increased. 　　Taking Jianfeng Chemical as an example, according to an interview with a reporter from the company’s securities department, “In the whole year of 2009, production has been suspended three times for overhaul. ”According to the company's announcement on December 29, the 2010 routine maintenance and shutdown time of the company's fertilizer equipment was initially scheduled from January 1 to March 11, 2010, during which production was stagnant. 　　Due to the overall insufficient supply of natural gas, gas consumption by industrial enterprises can only be reduced to ensure civilian use. Many listed companies that use natural gas as raw materials to produce urea have been affected. The shortage of natural gas has also directly led to price increases and increased the production burden of industrial enterprises. According to information provided by Zhuochuang Information, natural gas prices have been rising recently. The wholesale price in South China has risen from about 4,000 yuan per ton to 4,800-5,200 yuan/ton, and in the northern region, it has increased from about 3,000 yuan/ton to nearly 4,000 yuan/ton, an increase of 20% to 30%. 　　However, the current upward trend of urea is still stable. In an interview with reporters, a person from the Luxi Chemical Securities Department said that the company's urea ex-factory price is updated daily. The price has been relatively stable since the beginning of December and can only be said to have increased slightly. 　　However, some analysts believe that as spring plowing approaches, the price increase of urea may accelerate. “At present, dealers are stepping up stocking, and the periodic rise in urea is still sustainable. ”Yang Ruomu, a basic chemical analyst at Dongxing Securities, said, “At present, electricity prices have been raised, and natural gas price reform is also a trend. The market once expected that natural gas prices would start to increase in early 2010. Factors that increase raw material prices and push urea prices to continue to rise still exist. ” 　　Yang Ruomu further pointed out that it is unclear when and how much natural gas prices will be raised. If the gas head urea companies lose the protection of gas prices, according to the production of one ton of urea, which requires 600-700 cubic meters of natural gas, the cost will rise to about 250 yuan/ton. The current cost of gas head urea is 1,300-1,400 yuan/ton. By then, the cost will reach about 1,550-1,650 yuan/ton, which will be very close to the cost of coal head (coal-based) urea companies. Analysts from Orient Securities believe that if the situation of Qitou fertilizer companies being restricted by raw material bottlenecks continues, it will be a boon for coal companies. After all, compared with natural gas, my country has huge coal reserves, and coal companies will not affect production due to a shortage of raw materials.