Urea prices and trends in some areas of the country as of March 4, 2010

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The price of urea produced by Fujian Shunchang Fubao remains stable; the current factory price is 1,900 yuan per ton. Production is operating normally, while sales volume is average. Domestic urea prices are showing a slight decline. Currently, the overall domestic urea market remains weak; due to abnormal weather conditions and lack of confidence, demand fails to pick up, and the general trend continues to be downward. In Shandong, Hebei, and Henan provinces, the standard ex-factory prices range from 1,750 to 1,770 yuan per ton; in some areas, the prices for lower-quality products drop to around 1,730 yuan per ton. Moreover, the volume of transactions remains low. The wholesale prices in the Guangdong and Guangxi regions have also gradually dropped to 1,900–1,930 yuan per ton. In the Hubei and Hunan regions, while the main pricing remains stable for now, some manufacturers have reduced their prices slightly. Currently, the ex-factory prices in Hubei range from 1,800–1,850 yuan per ton, while those in Hunan range from 1,860–1,900 yuan per ton; it is very difficult to complete transactions in these areas as well. Due to the unsatisfactory sales performance recently, manufacturers across the country are facing increasing inventory pressures. At present, many small and medium-sized manufacturers in Hebei and Henan provinces have inventories of around 5,000 tons, while larger manufacturers have inventories of 10,000 to 20,000 tons. At present, there are no signs of improvement in the domestic urea market. Climate factors such as low temperatures, blizzards, and droughts have delayed the emergence of demand in the spring, thereby reducing the chances of a significant rise in urea prices. It is expected that the main market trend in the near future will gradually shift from a slow decline to a stalemate, and the situation should improve once markets in regions such as Hebei, Shandong, and the Northeast start to recover. The ex-factory price of urea in Jiangjin, Chongqing is 1,850 yuan per ton. Currently, shipments within the region are proceeding smoothly, while shipments to other areas are facing difficulties. Production is running normally. The urea production facility in Hainan’s Fudao is operating as usual; prices have remained stable recently. The standard ex-plant price is 1,800 yuan per ton on the island itself, and 1,780 yuan per ton outside the island, with low transaction volume. The urea production at Shandong Hualu Hengsheng is operating normally, with a daily output of 3,300 tons. The price offered to external customers is around 1,760 yuan per ton; sales performance is not satisfactory, and there is some inventory available. The urea production facility in Xinyi, Jiangsu, is operating normally; however, prices continue to decline slightly. The current average ex-plant price is around 1,770 yuan per ton, and market sales remain weak. Yuntianhua’s urea production is operating normally. Due to difficulties in selling the product within the province, and since reducing prices does not solve this issue, Tianmeng still lists the price at 2,010 yuan per ton, with a daily production volume of 4,000 tons. The product is mainly supplied to existing customers, and the inventory level is around 70,000 tons. Domestic urea prices are still declining slowly. The urea market in Shandong, Hebei, and Henan provinces remains unchanged; the mainstream selling price is 1,760–1,780 yuan per ton, with a continued slow decline. In Shandong, the prices for lower-quality urea are approaching 1,750 yuan per ton, while in Henan some manufacturers have indicated that they are willing to accept orders at prices below 1,750 yuan per ton. However, there are still no deals being made at present. Following the settlement price of 1,780 yuan per ton in the Northwest region last week, overall market activity declined significantly; both manufacturer quotes and market sale prices dropped. At present, aside from Shaanxi where the export price remains at 1,850 yuan per ton, urea export prices in other regions of the Northwest are generally around 1,780–1,790 yuan per ton, with very little trade taking place. In the southwestern region, the fertilizer market in spring started slowly due to drought, and as the shortage of natural gas supply improved, urea production increased. As a result, there were signs of a decline in the actual ex-factory prices of urea in Sichuan and Chongqing. Currently, the ex-factory price of urea in Chongqing is between 1,800 and 1,850 yuan per ton, while in Sichuan it ranges from 1,840 to 1,900 yuan per ton. Overall, due to factors such as heavy snow and drought, there has been no significant demand in the market for fertilizers during spring. Coupled with an oversupply of urea in the domestic market, urea prices in the Central China region are likely to experience further slight declines in the next couple of days. The situation is expected to improve once markets in regions such as Hebei, Shandong, and the Northeast start to pick up activity.