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September Urine Market Monthly Report Author/Source: China Fertilizer Network Date: 2016-10-09 Clicks: 4 Domestic agricultural demand remained weak this month. In the first two weeks, purchases of urea by industrial compound fertilizer manufacturers helped boost prices; prices in regions such as Shandong, the Two Rivers area, Jiangsu and Anhui, Hubei, and Sichuan all increased to varying degrees. Purchases by these manufacturers slowed down slightly by the third week, and by the end of the month they had virtually stopped altogether (the operating rate of compound fertilizer plants rose again but then dropped to around 57%, a decrease of about 6 percentage points compared to the end of the previous month)； Market participants have high expectations regarding India’s tender on February 22 for 1.5 million tons of urea; the final amount won by Chinese companies… (the omitted part is available in the member area; same below). In addition, compound fertilizer manufacturers purchase a small amount of urea for use in autumn fertilizers. The key issues are the high price of coal and significant cost pressures, which keep the overall utilization rate of urea production low. As a result, domestic manufacturers’ prices remain stable or slightly decline in the second half of the month, with only a few manufacturers seeing slight price increases due to factors such as their own production levels. In a few regions such as Yunnan, Guizhou, Xinjiang, and parts of the Northeast, sales remain average, while prices have remained stable as the utilization rate is generally low. Compared to the end of last month, the production of autumn compound fertilizers in the first two weeks had a significant positive impact on the urea market in Shandong Province, leading to a noticeable increase in prices. However, as compound fertilizer manufacturers slowed down their purchases of urea, the mainstream ex-plant prices stabilized or even declined slightly. As of now, the mainstream ex-factory prices in Shandong region have risen by 30 yuan (per ton, the same below) from the end of last month to 1190–1200 yuan. The prices at delivery points in Linyi have increased by 30–35 yuan to... (around 1250–1260 yuan by the end of the second weekend, after which delivery slowed down and prices dropped) ； In the first two weeks, the price of urea in the Two Rivers region also rose significantly; it declined slightly in the following two weeks. The mainstream ex-factory prices in Hebei region increased by only 10–25 yuan, reaching 1170–1185 yuan. Some large manufacturers placed orders for approximately 50,000 tons at ports at the end of this month, but these orders have not yet been fully fulfilled. In the Henan region, the mainstream ex-factory prices rose by around 20 yuan, reaching 1180–1190 yuan, with slightly greater discounts on transactions. By the end of the month, the ex-factory prices were still…… ； In the early part of the month in Shanxi region, the pressure to sell goods externally decreased slightly, leading to an increase in prices; however, sales conditions deteriorated in the second half of the month. The main factory prices increased by only 20 yuan for the high-end products, reaching 1100–1120 yuan, while very few low-end products were sold at 1080 yuan ； There is slight local demand in the Jiangsu-Anhui region, and the arrival of urea from other provinces has decreased. The mainstream ex-factory prices in Jiangsu have risen by 50-60 yuan to 1310-1350 yuan; manufacturers are gradually resuming production or increasing their output levels, with the local operation rate rising from around 33% to about 48%. In the Anhui region, the mainstream ex-factory prices have increased by 30-50 yuan to 1240-1260 yuan. However, sales performance was slightly poor towards the end of the month due to continuous rainfall ； The mainstream ex-factory prices in Hubei region have increased by 10–20 yuan, reaching around 1,250 yuan; sales are fairly good, and manufacturers offer lower prices of 10–20 yuan for large orders ； The mainstream ex-factory prices in Zhejiang region have risen by about 50 yuan, reaching 1310–1330 yuan, according to the manufacturers…… ； The production rate in Fujian region... In the middle of the month, the standard ex-plant price rose to 1390 yuan; however, as sales performance declined and low-priced supplies from other sources began to arrive, the local standard ex-plant price for urea dropped back to 1340 yuan ； In the Guangxi region, local manufacturers have all stopped production and are selling their existing inventory. The standard factory prices have increased by 80 yuan, reaching around 1,480 yuan, though the actual transaction prices are slightly lower. Demand in the downstream areas of Yunnan is slightly weaker, and cheap goods from other regions continue to dominate the market; the mainstream factory prices have dropped by 50 yuan, ranging from 1400 to 1530 yuan ； There is virtually no local demand in the Xinjiang region; exports remain the main channel for sales. The standard factory prices have dropped by 50–70 yuan, reaching 850–930 yuan for products destined for export... A large factory in the Heilongjiang region produced only SODM this month to supply the provincial company, Jilin... Regarding large-grained products, driven by the peak production activity in compound fertilizer factories during the first half of the month, an increase in orders received, and some manufacturers placing slightly more orders through ports, the mainstream ex-factory prices in most regions also rose. Compared to the end of last month, the mainstream ex-factory prices in Shandong region saw a sharp increase before falling to 1210–1230 yuan ； The mainstream ex-factory price in Henan region has risen by 40 yuan to 1,190–1,200 yuan ； In the Shanxi region, the mainstream factory prices have increased by 20 yuan at the lower end, reaching 1120–1140 yuan ； The mainstream ex-factory prices in Inner Mongolia have risen by 40–100 yuan, reaching 1,080–1,200 yuan. International urea prices are showing slight fluctuations. …… Overall, the demand for raw material urea driven by domestic production of compound fertilizers in autumn has gradually diminished (the operating rate of compound fertilizer plants dropped by about 6 percentage points to around 57%). The limited stockpiling of fertilizers for autumn by distributors in some areas has also come to an end, and the impact of the tender held in India on the 22nd is not significant either ； Demand both domestically and internationally remains moderate, while high coal prices and strict regulations on overloading in road transport have increased the production costs of urea, leading to another decline in the overall utilization rate of urea production facilities (only…). Therefore, it is expected that urea prices will remain stable or slightly decline in the short term (around November). Manufacturers will continue to find it difficult to earn profits; should there be any improvements in terms of inventory levels or exports during the first half of the month, this could help stabilize or even raise prices. If the production facilities in Inner Mongolia and Xinjiang resume operations by the end of October, prices are likely to see only slight declines.