Since May, although there have been two significant downward trends in the domestic urea market, the overall trend is still strong. How will the urea market develop next? This paper analyzes multiple factors comprehensively.
Figure 1 Comparison chart of domestic urea price trend
The stamping affects the tempo
At present, the agricultural demand in Northeast China and Inner Mongolia is nearing the end, and other mainstream regions have not yet become a climate, resulting in pressure on the spot market. Amid the stalemate, India issued its first round of urea import tenders of the year. As far as the domestic and foreign markets are concerned, the production of Egyptian enterprises is unstable, China's export policy is temporarily unclear, and the bidding is favorable at this stage, which has boosted the domestic market sentiment. With the increase in the volume of new orders in mainstream areas and some enterprises, the market may continue to rise. The bid opening time is July 8, and the latest shipping date is August 27, which runs through the summer fertilizer production season in the mainstream area and the domestic autumn fertilizer production season, so the impact will appear twice, and then affect the rhythm of the spot market.
Demand remains volatile
At present, the domestic urea industry demand is relatively stable, and the demand mainly changes with the agricultural seasonality. From the perspective of time, the agricultural demand in Northeast China and Inner Mongolia is expected to end in early July; Other major regions are affected by drought conditions and demand may appear intermittently from July to August; Agricultural demand in Northwest China, Xinjiang and other regions is expected to gradually weaken from July to August. There is still a demand for rice fertilizer in some parts of the south, but the demand is not expected to be too large under the influence of continuous rainfall. However, after entering July, compound fertilizer companies will successively start the production of autumn fertilizer, and the amount of urea may increase slightly compared with June, but it will be significantly less than in May. Therefore, from the demand side, demand will continue to exist for a period of time in the future, but the phased market may weaken.
Supply concerns have been added
On the supply side, although there are not many planned maintenance enterprises at present, short-term failures of enterprises are more frequent from May to June, and the daily output has dropped to less than 170,000 tons in the past two days. The next Nissan will most likely fluctuate at 175,000~185,000 tons. The impact of changes in daily urea production in the future still needs to pay attention to the release time of new production capacity during the year. It is expected that there will be new production releases in Longhua, Quansheng, Yanhua and Dongping in July, but from the perspective of the time to put on the market, it may be after mid-July.
Figure 2 Comparison chart of Nissan trend in the domestic urea industry
Therefore, a comprehensive analysis, affected by demand expectations, export sentiment and the low level of the factory, the spot market volatility may continue until the first half of July, during the gap period of agricultural demand, there will be a certain fluctuation market. Subsequently, with the decline in agricultural demand and the release of new production capacity, the downward performance of the market is more obvious than the current one under the premise that exports have not yet been liberalized.
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Please indicate in the following format for reprinting: Source: Agricultural Resources Herald (Data source: Longzhong Information) Author: Wu Yuanli Editor: Ding Jiahui Review: Wang Meihong Producer: Jiang Shanjun