The recent price trend judgments on urea industry produces serious differences, the bears to the majority, this is entirely expected: urea dealer deficit of in successive years, excess capacity has win support among the people, unbearable battles; fall in international oil prices and international prices of agricultural products is low, resulting in a simple analogy psychological pressure; international urea prices have been lower than the Chinese export prices, export blocked; domestic urea prices have been higher than the breakeven point of the enterprise, capacity could be further release. It seems that every reasons are solid, urea will undoubtedly fall, could this be true?
Explanation: the price of a "mass base" problem.
The price of a product, the textbooks are summarized for two reasons: the cost push and demand pull, I joined the third reasons -- is expected to push. Among them, the cost push and is expected to push are based on on demand forecast. Chemical fertilizer is short sales certificates products, in the off-season, is expected to play a significant role, but in season, the relationship between supply and demand is bound to the return of the king. Last year in the pessimistic dominated case, phosphate and urea price increases of more than 200 yuan (ton price, the same below). The current until early March, agricultural demand for the upcoming season, optimistic about the market outlook had saved, not good, this time more likely not inventory, the market will soon reach a don't need "the basis of" demand pull back to the stage, the relationship between supply and demand level, bearish and bullish cannot determine the price trend.
Reply two: impact on oil prices.
Most commodities have been ahead of the fall in oil prices of more than half a year, the price has been low, falling oil prices conduction ability is very weak, therefore appeared the situation now: the market did not because of falling oil prices and the emergence of spiral commodity prices fall, or even reverse the oil prices, such as the crash of 2013 2014, diammonium phosphate, rose. Therefore, lower oil prices do not have to panic.
Reply three: views on the international market.
No doubt, the oil price transmission to the inevitable natural gas, resulting in decreased, head of urea competitiveness China coal export suffocate suffocate, but this does not mean that China cannot export import even urea. From the historical data to see, at up to 75% tariff situation, Chinese always to maintain export. In 2014 15% of tariff and on the basis of 50 yuan, 1 ~ June exports reached 4200000 tons, that is to say, if Chinese does not export, then the international urea prices inevitably rose. Import the saying is not set up. The dialectical relationship between the two, the international and domestic market based on the author thinks, reduce domestic prices and export must pull the rebound in international prices in the near future, the price of urea Chinese will become truly international market indicator.
Have to mention the urea first import country India. Oil head enterprises in India if you continue production, then India imports will only more than in previous years; if production, imports are also not less than in previous years, therefore India oil production caused by the head of reduced imports assumption does not hold. Over the years in India during 3 ~ April have a urea tender, I believe this year is no exception, because it is difficult to imagine that India will use the first half of the amount of the tender are incorporated in January to buy. If India in 3 ~ April bid invitation again, will and Chinese demand season coincide, will promote the international urea prices rose.
Reply four: capacity for further release.
State-owned enterprises and listing Corporation leading the domestic urea production capacity, production capacity is basically in the full release state, the loss of the case, production is not obvious; in a profitable time, output growth does not significantly.
Summary:
Since last November to February this year, Chinese Urea Export is expected to reach 7000000 tons, equivalent to the domestic current output than the same period in 1/3, the highest level in more than 4000000 tons. On the basis of the above analysis we can see, it is difficult to substantially increase the export of urea production, it is difficult to significantly reduce the gap in the short term, it is difficult to compensate.
The author thinks, this may be the relationship between supply and demand of urea in recent years one of the best years later this year, if not the price, so Chinese urea no chance