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Urea export domestic pressure - or will stop
Source: China fertilizer   Author:Yang Luyi   Time:2014-08-04   Read:601second  

According to the end of the India urea for publicity, the vast majority of bidder's quotation from 274-279 dollars / ton CIF price, this part of the volume of close to 1500000 tons. Finally, India IPL company to buy 1300000 tons of urea, which is expected to have about 1100000 tons of cargo will be Chinese provide. According to the bidding price projections, the FOB price of about 258-260 U. s.dollars / ton, the domestic ex factory price of only $1400-1430 yuan / ton, with the current 1450 yuan / tons of urea in a mainstream price 30-50 yuan / ton price differentials. However, with the last India bidding price without the city, less attention is different, the traders confidence has improved, the bid enthusiastically, seems to have full confidence in victory.

Nitrogen fertilizer association again against the lower export initiative. In India last week's bidding results, nitrogen fertilizer association in July 22nd again emergency interviews with large-scale production and operation of enterprises and that do not agree with India's tender results. After analyzing the export price upside down costs and supply and demand the latter part of the domestic market or will have improved, called on everyone to boycott the urea price of export. And proposed to regulate the market, to avoid disorderly competition, low price supply enterprises should develop severe punitive measures. Objectively speaking, following the late June first round against the lower export effect significantly, India has just need, a new round of bidding game is expected. Although the Chinese FOB proposed is low, but compared to the downturn of the market, the export price is just passable.

Look at the supply and demand balance domestic pressure in urea. Near the end, domestic urea market trend stabilization, manufacturers for game attitude export because of recent rain to drive sales and put aside. Part of the small and medium-sized dealers due to bearish market outlook in urea, operation has been "fed chain" of the situation. This to a certain extent, have reduced the production enterprise sales pressure, but this does not go on for long. From the analysis of June domestic urea production data, the national real urea production of 6148600 tons, year-on-year decrease of only 4.23%; as of 2014 the first half of the year, China's urea real output has reached 35721000 tons, compared with the same period last year less than 1% reduction. From the output of the data view, the so-called industry production or predict later tight supply lack of convincing. In fact, with the pre parking maintenance enterprises are small scale of production, domestic market analysis may take "pile up in excess of requirement".

To sum up, before the fertilizer association proposed $270 / ton FOB although rumors were denied, but can see us $260 / ton FOB indeed can not reach the association of psychological price, this also has two times to boycott the initiative. If able to 270 dollars / ton FOB calculation, the ex factory price will be close to 1470-1500 yuan / ton, equivalent to the current price of urea in, this is obviously an ideal price. But traders will suppress the price, just before taking into account the bidding game low fail, this can only make the moderate prices. And the final purchase 1300000 tons of the bidding result shows another "offer the operability and foreign China Urea Export expectations".

In fact, the domestic manufacturers to export urea is not completely indifferent, once the domestic sales into the off-season, inventory pressure potential necessary to rely on exports to digest. While showing a wait-and-see attitude, largely due to the nitrogen fertilizer association and colleagues face, the majority of urea enterprises for export only keep from talking about the topic. I believe, with export orders step by step, this temporary wait-and-see is likely to end in early August. Perhaps just as the domestic stability operations like Ming Anxiang, low-priced exports will find the better mode of operation, believe that in August there will be a marked increase in foreign trade orders.

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