Urea market, market dynamics

From the perspective of production capacity, the urea industry has witnessed the coexistence of new and eliminated production capacity. Operating in the existing mode of low profit or even loss, especially the financial pressure on small businesses will increase, and environmental protection issues have been the focus of everyone this year. Under this background, some SMEs that do not meet environmental standards will gradually Exit the urea industry. In addition, urea production is also affected by related products, many companies through the technical transformation of urea production, to maximize corporate profits, this point from the show last year, so although excess capacity, but the actual output is not expected to be fully released.

In addition, the first half of the year is the traditional fertilizer season. 80% of the annual fertilizer consumption is digested before August. The winter storage in recent years is basically a state of losing money. As a result, dealers are not stocking winter stocks, and the overall social inventory is not Large, especially large company stocks have fallen sharply from previous years. In addition, there is no window period for exports this year, but there are few port inventories. In the same period last year, at least 2 million tons of stockpiles were waiting for exports in July.

In addition, from the export perspective, India is still the main battlefield of China's urea, India's customs statistics show that India from January to December 2014, cumulative imports of urea from the international market 7.277 million tons; of which imports from China 5.09 million tons, accounting for 69.9%; 1.437 million tons and 631,000 tons were imported from Oman and Iran respectively; 119,000 tons were imported from other countries and regions. In the Middle East market, in 2014, urea production was 19,200,000 tons, and actual export volume reached more than 16 million tons. However, such a large amount of exports did not enter the Indian market. It can be seen that although the cost of urea in the Middle East is low, its sales model is not used. The marketing mode of bargaining each other to expand the sales market, the Middle East urea in this year will not be a large number of impact on the Southeast Asian market, so the export market is completely unnecessary to excessive panic bearish.

In the first two months of this year, the fertilizer market as a whole maintained a slight upward trend, but it still faced oversupply problems such as oversupply. According to industry sources, it is expected that the prices of major fertilizer varieties will remain low and slowly pick up, in view of multiple factors such as the global economic slowdown, falling commodity prices, and the domestic economic situation.

After the consternation had passed and the temperature began to gradually rise, the urea market, which had experienced a wave of rise before and after the Spring Festival, regained its downward momentum. The market gradually enveloped the bad atmosphere. Industry analysts said that due to the current sluggish demand for industrial and agricultural, international export support is not enough, it is expected that the domestic urea market will continue to weaken in the near future, the market outlook is mainly to see whether the demand for agriculture can pick up.

The market has no good support. On March 16th, China's urea wholesale price index (CNPI) was 1699.03 points, up 7.83 points month-on-month, or 0.46%, and down 39.91 points year-on-year, a decrease of 2.30%; and down 179.91 points, or 9.66%, from the base period. . On March 16th, China's urea retail price index (CNRI) was 1783.34 points, up 5.58 points month-on-month, or 0.31%, and down 117.62 points, or 6.17%, from the base period.

International urea market transactions were dull, with small granule urea prices in major regions continuing to decline. Among them, the Baltic urea FOB price fell by US$5 to US$8/ton from the previous week, and remained at US$260 to US$270/ton; the FOB urea FOB price in the Arabian Gulf fell by US$5 to US$10/ton from the previous week. It stayed at US$290 to US$300 per ton; Yuri’s FOB urea price fell by US$7/ton from the previous week and remained at US$266 to US$275/ton. The price of small granule urea in China fell by US$8/ton from the previous week, and the price of small-grain urea was maintained at US$276 to US$280/ton.

Domestically, as the urea market continued to be poorly delivered and domestic demand was weak, high-end offers fell by 20 yuan to 50 yuan per ton. Treasure Island data show that in the eastern part of the country, the demand for agricultural products was wiped out, and the industry took the goods. The mainstream factory in Shandong Province was 1600 to 1650 yuan/ton, and the high-end price was basically no deal. The factory in Linyi market started slowly, and the atmosphere of the trading was still light. Subsidiary companies in northern Jiangsu are downgraded to 1,640 yuan/ton, and actually take the goods slightly lower. The number of pending orders for Anhui enterprises has been small, and high-end prices have dropped by 10 yuan to 20 yuan/ton. The pressure on the investment in North China has gradually emerged, the demand has not changed, and the pressure on the market is also high. Hebei factory 1600 yuan ~ 1630 yuan / ton, Shanxi station price to 1540 yuan to 1550 yuan / ton, the main supply for the Northeast and the port, take the goods in general. Industrial start-ups in South China have not yet started. Markets are more cautious. Northeast and northwestern regions are tepid. Demand for local agricultural markets is normal. Southwest shipments are not under much pressure, and prices of some companies have risen slightly by 10 yuan to 30 yuan. Ton. The large-particle urea market continued to be sluggish. The Heilongjiang market received less volume, and Liaoning's low-end arrival price was only around 1,750 yuan/ton.

The market outlook needs to pick up demand It is reported that after the urea market experienced post-election upward adjustments, the majority of new single-listed companies failed to follow up, coupled with environmental pressures. Industry insiders expect that the urea market will continue to adjust steadily and narrowly in the near future. Treasurer Island analyst Yu Weiling said in an interview with an International Business Daily reporter that he heard that India will have a urea tender at the end of March. However, the specific time and quantity of tenders have not yet been verified, and it is difficult to form an effective impact in the short term. At present, the domestic market for spring ploughing and fertilizer use is recovering. The demand for fertilizers in Shandong and Lianghe is still acceptable, and port demand has been temporarily weak. The market demand in East China and Central China is weak, and the enthusiasm of downstream distributors to pick up goods is not high. Wholesale prices in major provinces and cities are reduced by RMB 10 to RMB 45/ton, and retail prices are reduced by RMB 10 to RMB 30/ton. In addition, due to the convening of compound fertilizer companies in North China and East China, there was a stoppage of production, and the demand for industrial fertilizers was significantly reduced.

On the whole, the market cautious wait-and-see sentiment unabated, the lack of international export support, domestic demand boosted the fatigue, is expected that the overall domestic urea market as a whole stable and weak trend continues, the market outlook still needs to pay close attention to post-industrial recovery and agricultural demand Warmer.