Urea prices ushered in a wave of rising in the middle of December, the factory in Shandong, Henan, Anhui, Jiangsu and other places on consecutive days prices rose slightly. At present, the mainstream of the Shandong area factory gate prices to 1560 yuan / ton, the mainstream of Henan area of the ex factory price also rose to 1540 yuan / ton. Urea prices was mainly influenced by the tariff policy of positive expectations, with the December 16th new tariff policy introduced, urea prices have stabilized.

The tariff policy support prices higher

"Affected by the tariff advantage good policy, the recent Henan urea prices rose 40-50 yuan / ton, the current mainstream price reached 1530-1540 yuan / ton, with urea prices rise, the Henan area market gradually start, the province of agricultural and industrial demand off-season reserves with the volume gradually increased." Henan Jin Kai Group general manager Yan Chemical Co. Ltd. assistant Yang Tongyu told reporters. Since the winter storage, urea market remains in the doldrums, near the end of the year, with the tariff policy, cancel the season window period makes the enterprises to export situation is relatively optimistic about next year, urea prices also appeared steadily.

Ruixing Group Sales Company Limited manager Liu Weichang also said, the recent tariff policy favorable support price of urea, a certain degree of rebound, the market go volume also in ascension. "The recent Shandong urea prices rebound, the mainstream of the ex factory price increase 50 yuan / ton to 1560 yuan / ton, is currently mainly industrial and port demand, local agriculture has certain preparing fertilizer quantity, the overall point of view, the market gradually warmer."

The introduction of the new tariff can be said to restore market confidence, also to a certain extent, given the market opportunities for speculation. With the gradual upward around the price of urea, the market acceptance in the lower parts of the current, the new single transaction is not ideal, some enterprises are still in the implementation of pre orders.

The market entered a stable period

In 2015 the Urea Export cancel the export window period, the annual implementation of 80 yuan / ton tariff although was the industry interpreted as positive, in fact policy has been long expected. Yang Tongyu think, the new tariff policy to a certain extent, to give the market confidence, but because the market had expected, so the early rise in price of urea. "The effect of this round of urea prices is mainly affected by the tariff policy, but as prices rise, the tariff effect gradually weakened, the market has entered a stable period of urea."

In fact, prior to the urea export policy has also been criticized by there, is that foreign export window period of irrationality to suppress domestic prices, making domestic urea exports has been in a passive situation, although exports hit record highs, but bring profit, enterprises have export is unspeakable. Yang Tongyu think, the new tariff policy cancellation of the season, which is not only conducive to enterprise normal production arrangement, also the stability of the market to a certain extent. Annual implementation of 80 yuan / ton tariff policies not only to protect the domestic use of fertilizer, and the protection of resources in a certain degree of erosion.

Liu Weichang also thinks, the new tariff policies conducive to market stability. "Export as a way to defuse the overcapacity will inevitably lead to vicious competition, but in fact, nearly two years the export efficiency is not optimistic, the domestic urea FOB price significantly lower than the price in the international market, with the new tariff policy, cancel the urea export season, prices will gradually stabilized, it can be said that the market has entered a stable urea period."

The short-term up space is limited

Yang Tongyu said, because the tariff policy has been promulgated, urea prices also appeared a certain degree of rebound, short-term price rise little space, or will with firm give priority to. "The current domestic winter storage market started signs, but concentrated take goods phenomenon did not occur, the enterprises are still mainly to set in Hong Kong, with the increase of the amount set in Hong Kong, the centre of gravity of the enterprise will be transferred to the domestic market, at present the industry operating rate remained high, but because the domestic market is still a gap, so it is expected before the Spring Festival, urea prices will be stable, do not rule out the local area due to agricultural demand release and the emergence of prices rose slightly."

Liu Weichang also said, the short term, urea market situation in the gradually improving, due to the basic market is still out of stock, so the price of urea may appear stable and slightly rise. "At present, enterprises mainly in port based in Hong Kong, the price reached 1640 yuan / ton, and the domestic market prices of basic fairness, with the domestic market demand of fertilizer, urea prices are expected to remain stable and slightly rising trend."

Overall, the coal resources tax whether before or just introduced export policy, have formed good support for urea market downturn. With the landing new tariff policy, next year's urea exports will unlock in the round, this also makes China's urea prices will gradually with international standards. The international urea prices trend determines the level of export prices, while export prices affect the domestic market. From the global situation of urea, urea in 2015 overcapacity will also aggravate. So, with the gradual weakening of good policy effect, urea market will return to the rational, in the face of the international market competition, domestic enterprises should also be a rational view. (Zhang Gaoke)