Urea prices have finally stabilized

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Author/Source: Agri-Materials News. Last week (November 11–November 18), the domestic urea market remained stable overall, with production rates staying low. After the onset of winter, coal prices remained high, providing a favorable support for urea costs. Downstream demand remains modest, but supply and costs are sufficient to keep market prices stable. Urea producers that reduced production have not resumed operations, and there is tight shipping capacity in some areas; therefore, prices for urea are expected to remain high ； Driven by downstream demand, the operating rate of compound fertilizers is rising slowly, and there is potential in industrial demand. 　　In North China, the price of small-grain urea still has upward momentum. The operating rates of downstream compound fertilizer manufacturers are not high; there is ongoing demand for small-scale orders, and there is also potential for demand from industrial purchases. Urea manufacturers are clearly inclined to maintain high prices. Currently, the mainstream price for small-particle urea is 1,410–1,510 yuan per ton (the same unit applies below). The price of large-grain urea continues to remain high; international prices have risen significantly, which has positively impacted the domestic market. Additionally, the supply of large-grain urea is limited, and transportation poses certain challenges. Companies do not face sales pressure in the short term, and prices are likely to continue rising in the future. The urea market in Shandong remains stable overall; the standard ex-factory price for small and medium-sized granule urea is 1,510–1,530 yuan, while the price for lower-quality urea is 1,480 yuan ； Large particles cost 1,570–1,590 yuan; the utilization rate of enterprises is low, supply is limited, and orders are primarily met to satisfy industrial demands. In the Linyi market, industrial procurement is growing at a slow pace, and prices have seen a slight decline; the prevailing purchase price for small-grain urea by traders is 1,560 yuan. Trading activity in the Heze market has slowed down; traders dealing in goods from within Shandong Province are purchasing at around 1,550 yuan per unit, while the price of goods from other regions is slightly lower. 　　In East China, urea prices have continued to rise due to increasing costs and low factory utilization rates. Currently, the supply available in the market is limited, so prices are expected to remain stable. Urea prices in Jiangsu are on the rise, with steady sales by companies. The ex-factory price for small-grained urea is 1,650 yuan, while that for large-grained urea is 1,680 yuan. 　　In Central China, coal supply is tight; urea manufacturers face high costs, resulting in low operating rates. Moreover, most of the plants that have stopped production do not plan to resume operations in the short term. Henan-based companies do not have high inventory levels; they mainly handle orders with advance payments. The standard factory price for small-grain urea is between 1,460 and 1,490 yuan. 　　In the northwest, due to transportation constraints, companies have fewer sources from which to ship goods, resulting in higher inventory levels compared to before. The mainstream price for small-grained urea is 1,300–1,550 yuan, while that for large-grained urea is 1,250–1,350 yuan. 　　Internationally, urea prices have risen significantly in Egypt and Algeria; the ex-ship price in Egypt has increased from $230 to $270. The reduction in Chinese export supplies has, to some extent, driven up international prices. Europe, Turkey, and most parts of the United States have begun purchasing urea in preparation for spring fertilization. The FOB price in the U.S. Gulf region rose to $255–$257 in January 2017, corresponding to a CIF price of $275. The bidding price for STC in India on November 16 was 40 dollars higher than expected; the sources of supply include Iran, China, the Gulf States, and Russia. The lowest quotes were 244.10 dollars for delivery to the West Coast and 246.66 dollars for delivery to the East Coast.