Weekly Urea Market Report for the Third Week of August 2016

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Weekly Report on the Urea Market for the Third Week of August Author/Source: China Fertilizer Network Date: 2016-08-22 Clicks: 7 At present, there is little agricultural demand in the urea market; in some areas, industrial compound fertilizer manufacturers have increased their purchases of urea as raw material (the overall operating rate of compound fertilizer production rose to 62%, an increase of 7 percentage points compared to the previous week). However, the overall operating rate has decreased again, leading to stability in the urea market trends. The market conditions in Shandong’s Lianghe region and Jiangsu are slightly better; manufacturers have raised their prices, while the market conditions in the Northwest, Guangdong and Guangxi, Southeast, and Southwest remain weak. In the Shandong region, urea prices first declined before rising; the mainstream ex-factory prices increased by 10 yuan per ton compared to last week, reaching 1130–1150 yuan. The main reason for this is the operating rate of urea production facilities… (Further details are available in the member area.) On the industrial side, there was an increase in orders for the production of compound fertilizers, and the purchase price in Linyi rose by 40 yuan compared to last week…… ； The mainstream ex-factory prices in Hebei region remain stable at 1,110–1,130 yuan. A major manufacturer has stopped using its high-cost equipment due to severe losses; currently, the overall production rate is... A few manufacturers have raised their prices by 10 yuan ； In the Henan region, the mainstream ex-factory prices have increased by 10 yuan, reaching 1140–1150 yuan. According to China Fertilizer Network, due to environmental inspections, the demand for urea in local compound fertilizer production remains low, so the transaction prices stay low as well…… ； In the Shanxi region, the mainstream factory prices for high-end products have dropped by 20 yuan, to around 1,100 yuan; transactions for large orders placed externally are based on these factory prices…… ； The mainstream ex-factory prices in Jiangsu region have dropped by 10–40 yuan, to 1210–1240 yuan. However, the operating rate has declined to... On Friday, manufacturers in northern Jiangsu raised their prices by 10 yuan, and further minor increases are likely in the short term ； In the Anhui region, the mainstream factory prices have dropped by 20 yuan, reaching 1160–1210 yuan; demand is not very high in the short term ； Sales performance in the Zhejiang region is fairly average, with the standard factory prices dropping by 30 yuan to 1280–1300 yuan ； The mainstream ex-factory prices in Fujian region have dropped by 50–80 yuan, reaching 1300–1370 yuan; recently, some manufacturers have stopped production for maintenance ； After the agricultural demand in the Guangxi region subsided, sales of urea were average; the main factory prices dropped by 20 yuan to around 1,480 yuan. There were discounts available at the time of purchase, as there was an abundance of urea at lower prices from other provinces (the price at the first delivery point…). It is expected that local prices will continue to fall in the future ； Manufacturers in Xinjiang are highly inclined to raise prices due to production at a loss; the domestic selling price there remains stable at 950–1000 yuan. However, it is reported that the price in the latest tender conducted in Xinjiang is only... , while the price for export is…… ； Demand in the Northeast region is weak; manufacturers maintain stable ex-factory prices. Only a few distributors believe that prices have reached their bottom, which has increased their willingness to purchase. The price of goods from Inner Mongolia at the delivery point has risen to 1100–1150 yuan (previous transaction prices…). 　　Internationally, urea prices have all risen,... In the tender held on August 12 by India’s IPL company for 120,000 tons of urea, two batches of Iranian urea were selected as winners; through negotiations, the winning price was $194.43 per ton CIF…… ； India may hold a new large-scale urea procurement tender in the first half of September. 　　Overall, there is no demand for urea in most areas of the country, and distributors are also not active in making strategic stockpiles. Demand for urea in the industrial compound fertilizer sector has increased, but the operating rate of the urea industry remains low, at around... As a result, urea prices have begun to rise in some areas. However, the demand for urea due to autumn fertilizer production is likely to be limited, and this will not change the overall situation of an oversupply of urea; therefore, price increases are unlikely to exceed 50 yuan, with prices remaining relatively stable in some areas. Internationally, urea prices have been on the rise for about three weeks; if this positive trend continues, it could boost China’s urea exports. Therefore, attention should be focused on changes in production capacity as well as developments in the export sector.