In recent years, China is the world's lowest price of urea substantially, especially last year is staggering. Under normal circumstances, China urea FOB funny t price $ 20 lower than the international price to 30, sometimes even as low as $ 50. And many people have become accustomed to cheap Chinese urea seemed to take for granted. But this year in the form of a reversal, China's urea prices higher than the international market of 15 to 20 US dollars, China's urea price from depression into a highland, this what is the reason?

First look at the domestic market, the domestic prices up for two reasons:

First, a large number of exports last year, while production fell, so as to reduce the supply of the domestic market supply, market supply and demand eased. According to the China Nitrogen Fertilizer Industry Association statistics, this year, down from about 10 percent the amount of resources. Data show that in 2014 China's urea production decreased by 1.15 million tons, exports increased by 5.35 million tons, 6.36 million tons annual reduction in the supply of year. While consumption increased by 1.5 million tons. 2014 not only digest the early accumulation of inventory, but also consumes most of this should be carried forward to 2015 urea. The demand side, demand in 2015 is expected to remain stable urea agriculture, industrial demand for 6% to 8% growth. It is estimated that in 2015 industrial demand for urea at 16 million tons, an increase of 1 million tons. A major increase from the wood-based panels, thermal power, cement flue gas denitrification, automotive urea.

Second, the cost of support. Urea large business losses, according to industry statistics, 2014 fertilizer market is extremely sluggish, companies large losses, the industry's main business income of 261.67 billion yuan, down 6.2 percent over the previous year, a loss of 5.66 billion yuan: The above total size of the whole industry Enterprise 331, 156 loss-making enterprises, the loss amounted to 47.1%.

Let's look at the international market, the first months of this year the Baltic urea downlink $ 70 / ton, the downstream Black Sea urea $ 64 / ton. The international market price of urea dropped for three reasons:

First, the international oil prices fell sharply. The vast majority of international urea using natural gas as raw material, after oil prices fell sharply, natural gas prices also lower, reducing production costs. Last year, natural gas prices in Ukraine urea plant but had high losses, was forced to stop production. But this year with natural gas prices, even if the price of urea this year, the lowest price is lower than last year $ 20 / ton, companies are still in production. It is reported that manufacturers will not consider temporarily stop or cut, unless the urea price and then down $ 10 / ton.

Second, the poor demand. Thailand imports of urea, 36,000 tons in February, is the calendar year lows. Imports last year was 18.1 million tons. 1 to 2 months total imports of only 178,000 tons of urea, down 37%. February Australian import 158,000 tons of urea, 1 to 2 months total imports 179,000 tons, down 32,000 tons. In addition, the United States and other countries due to the cold weather delayed the demand for urea. Europe showing weakness, demand is limited.

Third, the fear of a large number of Chinese urea exports. Last year, China's export volume of urea up to 13.62 million tons, accounting for 30 percent of international trade. This year Chinese fertilizer export policy further easing, the abolition of seasonal policies, instead annual unified by 80 yuan / ton tariff. This triggered a panic in the international part of the manufacturers fear this year, China's urea export volume will increase, thus the use of low-cost policies to deal with.

Facts have proved that China can urea prices higher than international prices, Chinese urea companies should establish self-confidence, do not sell ourselves short, do not always think of low-priced exports. We hope Chinese urea prices higher than international prices could become a new norm.