Last week, the positive stimulus by the 2013 fertilizer export policy, the domestic price of urea to further consolidate, local regions chase, mainstream factory price rose from 2000 to 2180 yuan (t price, the same below). According to the latest export policy of urea, urea manufacturers export profit next year will rise by 200 yuan, domestic urea market is undoubtedly a good news. However, in the long term, the domestic urea market still faces three major challenges. 

One of the challenges, the domestic urea industry overcapacity. The overcapacity word in recent years, frequent use of urea overcapacity contradictions will appear highlighted at the end of next year. In the past two years, with the pre-cast construction of urea project gradually put into production to the annual urea expansion of production capacity of 500 million tons. According to the statistics of China Nitrogen Fertilizer Industry Association, to the end of the year, the National Urea total capacity will reach 71.3 million tons; 2015 to 2017, this figure will climb to more than 9,000 tons. According to the forecast, the "second five" the end of the national demand for urea is about 60 million tons. The exit less urea exports and backward production capacity and other factors, future urea excess production capacity up to 20 million tons. 

The second challenge, the uncertainty of the international market. Since July this year, the international urea market continued to be weak, especially in days, the small Baltic granular urea FOB always fluctuated up and down in the $ 400. The overcapacity problem also exists in the international market. According to the International Fertilizer Industry Association (IFA) estimates the 2012 global urea production capacity reached 196 million tons, the fertilizer urea consumption will reach 144 million tons, the industrial consumption of urea will be close to 19.7 million tons. Future international urea market oversupply contradiction gradually intensified, 2015 and 2016, the surplus accounted for a proportion of the total supply will be more than 8% and 10%, respectively. 

In addition, the Chinese urea export direction India, once India domestic the nitrogen nutrients compensation policy is bad, domestic fertilizer consumption in India will decline, thus affecting the nitrogen fertilizer imports. This is not strong competitiveness in the international market, China urea, will undoubtedly have an adverse impact. 

The third challenge, farmers fertilizer habits change and fertilizer decline in the enthusiasm. The current trend of fertilizer use large fertilizer gradually be replaced by the compound (mixed) fertilizer and new fertilizers, new with fat habits will improve the utilization of fertilizer nutrients, so the crops absorb the same amount of nutrients, new habits will lead to domestic use fertilizer fertilizer The amount of decline. In addition, since September this year, the multi-regional domestic fruits and vegetables unmarketable news broke, rice, wheat income less than ideal, these problems are likely to cause farmers to grow and fat enthusiasm decline, resulting in the decline in fertilizer demand . 

In addition, the fertilizer as an important agricultural production, the government allows fertilizer production and circulation enterprises to obtain a reasonable profit. However, there are variables related policies. The end of November 2010, the the urea export window period ended prematurely stable urea market forum, held in early May this year, the view from above, in the export driven by the New Deal, the urea prices next year if not necessarily to a new level. 

Face the challenges of the next year, the urea market is still no stranger to adversity. With urea manufacturers early cheap order gradually digest the recent price of urea is expected to appear in the January pullback.