Weekly Urea Market Report for the Second Week of August 2016

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Weekly Report on the Urea Market for the Second Week of August Author/Source: China Fertilizer Network Date: 2016-08-15 Clicks: 6 At present, there is virtually no agricultural demand in most areas of the country, and industrial demand for urea remains very low (the overall operating rate of compound fertilizers has risen to 55%, an increase of only 5 percentage points compared to the previous week). The domestic urea market remains in a weak state overall； This week, except for price increases in Guangxi and Xinjiang, urea prices in other regions have been declining steadily. In the Shandong region, prices have continued to drop since the end of the agricultural demand period last weekend. Compared to last week, the mainstream ex-factory prices have fallen by 30–40 yuan per ton, reaching 1130–1140 yuan. According to China Fertilizer Network, the ex-factory prices offered by local manufacturers for sales outside the region are generally not higher than 1100 yuan, while the prices at delivery points in Linyi are... (The rest is available in the member area; same applies here.) ； The prevailing ex-factory prices in the Hebei region remain stable at 1110–1130 yuan; there is considerable room for negotiation regarding the transaction price, with shipments originating from the manufacturers’ main ports ； The mainstream ex-factory prices in the Henan region have dropped by 20–30 yuan, to 1130–1150 yuan; prices can be negotiated for transactions, and most shipments are made from…… ； The mainstream ex-factory prices in Hubei region have dropped by 10–20 yuan, reaching 1220–1240 yuan, with slightly lower prices for larger orders ； The mainstream ex-factory prices in Fujian region have dropped by 20 yuan, ranging from 1350 to 1450 yuan. Regions with stable pricing include Shanxi, Jiangsu and Anhui, the Northeast, Shaanxi, Gansu, and Ningxia. In Shanxi, the standard ex-factory price remains stable at 1100–1120 yuan; some manufacturers are holding back supplies and waiting for better deals before selling. The production capacity in Jiangsu and Anhui is not high, while sales are slow in the Northeast, Shaanxi, Gansu, and Ningxia. Manufacturers in the Guangxi region have just resumed production, and the current operation rate is only around 46% after it has increased. Due to some local agricultural demand, the main export prices have risen by 30 yuan, to between 1480–1500 yuan. However, a large amount of low-cost urea from other provinces is arriving, and local agricultural demand has basically ended; therefore, urea prices are expected to continue to fall in the future ； Manufacturers in Xinjiang are highly inclined to raise prices due to production at a loss; recently, most of them reached an agreement that the ex-factory price within Xinjiang should be no less than 1,000 yuan, but the ex-factory price for shipments outside the region remains unknown. It is also unclear whether this agreement will be effectively implemented. 　　Internationally: Urea prices have been on the rise…… ； China’s offshore reference price for urea has seen a slight increase, with small-grain urea priced at 190–193 dollars, up by 2 dollars, while large-grain urea remains stable at 185–195 dollars. …… 　　Overall, demand in the industrial and agricultural sectors in most parts of the country is not satisfactory; the overall utilization rate of urea remains at around …, and there is still an oversupply relative to the demand gap. It is expected that urea prices will remain weak in the short term and continue to fall. If international market conditions continue to improve, and the somewhat concentrated production of fertilizer products by domestic compound fertilizer manufacturers in the autumn could boost the urea market, prices are likely to stabilize or rise slightly. Therefore, attention should be focused on urea exports and the production status of compound fertilizers towards the end of August.