Weekly Urea Market Report for the Fourth Week of October 2016

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Weekly Report on the Urea Market for the Fourth Week of October Author/Source: China Fertilizer Network Date: 2016-10-31 Clicks: 2 The price of coal, a key input in the urea production process, has risen again, leading to high production costs. As a result, the operating rates of urea manufacturers remain low. Some manufacturers still have a good volume of orders pending. Due to the large volume of coal, grain, and other goods being transported by rail recently, there is a shortage of rail transport in many areas; this has also increased the transportation costs for urea manufacturers in some regions. As a consequence, the available supply of urea in the market is limited. In most areas, urea prices continued to rise. However, in Xinjiang, the problem of insufficient rail transport has not been resolved, resulting in a decline in manufacturers’ pricing. Compared to last weekend, urea manufacturers in Shandong are operating at reduced capacity. Some of these manufacturers have good order volumes, with an increase in inquiries from downstream clients. The mainstream ex-factory prices have risen by 60–70 yuan, reaching 1310–1330 yuan. The price at delivery in Linyi is... (Some details are available in the member area; same for subsequent entries) ； Urea production capacity in Hebei region… The order situation for the two major urea manufacturers is good; the prevailing ex-factory prices have risen by 70–100 yuan, reaching 1320–1330 yuan. Some manufacturers are facing difficulties with transportation ； Sales in the Henan region are performing well, and there is considerable pressure on urea costs; as a result, the standard ex-factory prices have risen by 40-50 yuan, reaching 1320-1330 yuan. According to China Fertilizer Network, the actual prices at which manufacturers sell their products are generally…… ； Most large manufacturers in Shanxi Province have a large volume of orders pending shipment; the standard factory prices have increased by 60–100 yuan, reaching 1250–1260 yuan, while some manufacturers have stopped providing quotes ； The continuous rainy weather in Anhui region has led to somewhat poor sales performance; some manufacturers report a slight increase in inventory. However, driven by the regional urea prices reported in the weekly updates, the main export prices have risen by 20 yuan, reaching 1340–1350 yuan ； Due to tight supplies of urea, the amount of low-cost goods arriving from other regions in Jiangsu is limited; as a result, local manufacturers in Jiangsu are doing well in terms of sales. The mainstream factory prices have increased by 40–70 yuan, reaching 1380–1400 yuan…… ； The mainstream ex-factory prices in Hubei region have risen by 20–30 yuan, reaching 1320–1350 yuan ； Guizhou’s production rate… I’ve heard that local manufacturers currently have a large number of orders pending, so they are not providing quotes for now ； The utilization rate of urea production in Fujian Province is… Meanwhile, urea manufacturers in neighboring regions such as Zhejiang and Jiangxi have continued to suspend production, while manufacturers in Guizhou are restricting new orders; as a result, the main export price in Fujian has risen by another 50 yuan, reaching around 1,440 yuan ； The order situation in the Shaanxi region has also been good; the mainstream factory prices have risen by 60–80 yuan, reaching around 1,300 yuan ； Due to difficulties in transporting goods out of the Xinjiang region, urea prices in Sichuan and Chongqing have also risen. The standard ex-factory price in Sichuan has increased by 30 yuan, reaching 1340–1440 yuan, while in Chongqing it has risen by 20 yuan, reaching 1300–1330 yuan ； Some manufacturers in Inner Mongolia have a large number of orders pending shipment; the standard factory prices remain stable at 1,060–1,180 yuan, while the prices for shipments to the Northeast rise to 1,350–1,380 yuan ； Demand in the Northeast region remains moderate, but the utilization rate is low. Additionally, the prices of goods arriving from other provinces have risen, which has led to an increase in the mainstream ex-factory prices in Heilongjiang Province by 140–170 yuan, reaching 1250–1280 yuan. In Liaoning Province, the mainstream ex-factory prices remain stable for now, but dealers’ enthusiasm for building inventory levels is currently low. The situation regarding shipments from the Xinjiang region remains unsatisfactory; most manufacturers prefer to store their products in-house. The mainstream factory prices have dropped by 30 yuan, ranging from 820 to 900 yuan. Local urea manufacturers say they will further discuss with railway companies the issue of tight shipping capacity. Internationally, urea prices continued to rise, … . Overall, there is a shortage of transportation capacity at the moment, resulting in difficulties in selling urea at low prices. Additionally, some manufacturers have a large volume of orders pending shipment, which contributes to a slight shortage of urea supply in the market. The sharp rise in coal prices puts pressure on urea production costs, keeping the operational rate at low levels (only...). Although urea manufacturers have raised their prices, some of them are still operating at a loss. It is expected that urea prices will continue to rise in most regions. Meanwhile, China is currently in a off-season for both industrial and agricultural demand (the overall operational rate for compound fertilizers is as low as around 27%), and small and medium-sized distributors remain cautious about stocking up on fertilizer. It is likely that the number of regions where prices will rise will decrease slightly. Going forward, it will be necessary to keep an eye on developments in transportation as well as the situation regarding urea export orders.