This week has entered the middle of June, the traditional fertilizer season coming, the domestic urea prices rebounded. In addition, the climate status quo "southern flood and northern drought" or briefly delayed the fertilizer, but it is expected to export and post positive overlay. Good from bad perspective, the recent price of urea stabilized stabilized, the rally has already priced in most of the bad, and the price of re-basing. I believe that with the downstream establish confidence in the market outlook, urea prices are likely to continue to be pushed up, the factory price or will reach 1800 yuan (t price, the same below).

Prices bottomed bad digestion

From a practical point of view, nothing less than the urea sales operations to buy and sell, but most dealers to seize the opportunity, often high-priced storage, low-cost selling situation. Of course, this also due to the urea industry overcapacity, forcing the ex-factory cost perennial hovering at the edge of the horizontal line. In other words, until the end of the first quarter of this year, the industry is not yet believe that ex-factory price of urea to break 1,600 yuan, most people still use to measure domestic exports FOB quote. In the first round of the market to cover short positions after the purchase price of urea, urea ex-factory price has reached 1720 ~ 1750 yuan, although beyond most people's expectations, but gradually accepted by the market. With the domestic fertilizer season approaching, the downstream shift the focus from exports to the domestic market. At this price bottomed need to provide confidence to industry, and support the ex-factory price of urea impact 1800 yuan mark.

Demand Structural Transformation

Recent demand for raw materials urea fertilizer production ended, positive support industrial fertilizer weakened. Meanwhile, the South frequent precipitation, rubber industry operating rate suffered a serious setback, industrial procurement requirements of urea greatly reduced. It has also become the end of May early June urea market volatility fuse. Agricultural procurement needs timely follow-up, coupled with lack of market stock, urea prices quickly stabilized, the emergence of local market was up.

But there are worrying hazard exists. By the so-called El Nino extreme weather, climate country during the year or will continue to "southern flood and northern drought", the impact on crop production is bound to bear the brunt. In fact, from the beginning of this week has affected Anhui, Jiangsu and other places of the wheat harvest, they are more likely to postpone the round of urea prices. In addition, the "northern drought," the forecast will directly reduce the fertilizer dealers prepare for the post-corn enthusiasm, after all, China's agricultural production still can not get rid of "relying" dilemma. Climatic constraints on the urea prices in the latter part of the more obvious.

Exports will no longer concern

India's three year tender, urea is the game to a higher international price quotations. According to foreign media sources: urea FOB quotes, Black Sea (Youzhny) 290 to $ 298, 286 to 290 dollars Baltic Sea, China US $ 303 to 310. The tender price is undoubtedly directed from India. A high than the last tender price, meaning Indian hunters expected to fall several times. This time what the results of the tender will be out? Recalling the just-concluded Pakistan tender, urea level low end CIF at $ 318, and there are rumors that are sourced from China. Remove freight, FOB can be accounted to $ 303. Such push down the ex-factory price of only 1,600 yuan, is clearly lower than the mainstream offer 1,700 yuan. However, if the angle exist in Hong Kong or in part from the early low-cost companies eager to digest inventory considerations, $ 303 FOB or acceptable. Of course, this depends on whether public opinion to resist low exports again "to the party." In addition, the current mainstream of Chinese urea price set in Hong Kong in 1740 ~ 1760 yuan, the intention of the corresponding FOB price of around $ 310. In fact, because of the late demand uncertainty, the domestic manufacturers export renewed enthusiasm, the agricultural peak season demand in India due to start a further 800,000 tons of urea tender. Although the inevitable price game, but India remains from January to April, China imported 2.257 million tons of urea from the view of the fact that China is still master the pricing right to speak.