Why can’t urea prices drop?
Thread Content
In our country, urea production relies primarily on coal and natural gas as raw materials, with coal-based urea accounting for around 78% of the total production. The production cost of coal-based urea is mainly composed of raw coal, fuel coal, and electricity costs; the sum of these three elements accounts for about 70% of the total urea production cost. ?So unless coal prices are brought down, it will be difficult to reduce urea prices as well.
The current price of urea has reached a level nearly unseen in 10 years, and it has remained high throughout the first half of 2021 – a situation that is quite rare and the result of various factors both internationally and domestically. However, it represents a significant impact on agricultural fertilizers, and enthusiasm for growing crops will be dampened.