This week the domestic market must be differentiated from north to south, the southern market demand for light effect by weak urea prices, some manufacturers Ming steady kicked upstairs, while the northern Indian market is affected by the tender offer and the upcoming new round of agricultural demand, the price of urea quite different but it is mainly stable.
Production and demand will be synchronized to reduce and stabilize the main market trends
Currently, East China factory price of urea mainstream 1700-1800 yuan / ton, Jiangsu, Shandong, high price compared with the tens of dollars; North mainstream offer will remain at 1630-1650 yuan / ton; northeast ex-factory price is generally higher than 1950 yuan / ton; Central China 1750 yuan / ton. Because there are some differences in their respective regions of market demand, coupled with capacity and transport distance factors, the difference in the larger northern urea prices, but are stable based. Also the Xinjiang railway tariffs cut by 15% product policy implementation, post-urea will be sold elsewhere in Xinjiang regional and international markets is a big plus, but also in other parts of urea increased market competitiveness. Based on the above analysis, the latter part of the price of urea is still very price-based short term.
Into July, reducing agricultural demand and industrial demand of urea, the market appeared weak trend, coupled with an increase in rainfall in the South recently affected the agricultural demand, transportation issues has become a key factor in the market affected, so recent domestic Urea market tepid, showing a relatively stable market. However, Shandong and other places due to the large production, prices declined slightly. Shandong Luxi quoted as an example, as of press time before correspondents, ex-factory price has fallen below 1,700 yuan / ton and, according to feedback China Nitrogen Fertilizer Industry Association Information Center, the recent lack of market demand will result in local urea prices fluctuated slightly, but overall will continue to stabilize the main. It depends on a stable supply of the raw materials market dropped synchronization.
Recent anthracite market to wait and see. Currently downstream chemical market demand in general, compared to the pre-operating rate is not high, no space too can operate on coal market prices. Short-term market outlook is still expected to maintain the current level of downstream demand, so the market will not be much change in the coal, coal prices likely to continue to keep steady in. In natural gas, Southwest gas companies in the first half of this year because of supply shortage capacity utilization presented recently some companies also choose to cut, according to statistics in May this year compared to last year to reduce the urea production in Sichuan nearly 3% , to a certain extent, reduce the oversupply market pressures, but also disguised down the companies operating rate of urea.
Mentioned operating rate, in accordance with past year into June, the market value off-season fertilizer, domestic urea manufacturers began to choose during this downtime, the operating rate relative to March and April will be significantly decreased. This year is no exception, according to statistics of China Nitrogen Fertilizer Industry Association, nearly two weeks there has been a downward trend, but relative to the overall operating rate for 2014 rose, up 0.2 percentage points. Wherein the gas companies operating rate rose 1.7 percentage points from last week; the head of coal enterprises operating rate fell 0.5 percentage points, according to the enterprise feedback, recently affected by the southwest, northwest and some enterprises in Shandong, Jiangsu, production cuts, the domestic urea capacity utilization there will be a slight decline.
Exports more competitive than domestic sales
Good policy will help market stable
On the export side, India's fourth round of this year's auction bidding urea 80-90 million tons, of which Iran 18-19 million tons, about Arab approximately 18 million tons, 120,000 tons of the Black Sea region, and the remaining approximately 350,000 tons are sourced from China. Lowest CIF India $ 315.9 / ton accounting of only $ 305-307 FOB / ton, set in Hong Kong price is only 1700-1720 yuan / ton. Prior to its 1760 yuan / ton price set in Hong Kong, so that enterprises can not accept this price, resulting in domestic prices higher than export prices, in the face of weak domestic market situation, and gradually move closer to the selling price within the price set in Hong Kong, some analysts believe that such a to be out on the disguise factor down the domestic price.
On the current market situation, the domestic market demand, although reduced, but with the decline in capacity utilization, companies hardly any pressure on the stock, plus rising electricity and raw materials stabilized, the recent domestic urea prices will show a slight concussion, But overall stable market trend. The industry's most concerned about is the value-added tax and tariff policy issues.
On the promotion of the current policy, the fertilizer VAT recovery has been on the agenda. Coupled with a long period of market discussion and deliberation, companies already have a certain amount of mental preparation for the recovery of VAT, as a turnover tax, which is not much impact on urea production enterprises, on the one hand will cause price increases, on the other hand the cost of business will not grow. According to the relevant person in charge of the State Tax Administration, he said fertilizer has become one of the industry domestic surplus, and product attributes, although classified within a specific range, but from the point of view of industrial production recover VAT reasonable, is also conducive to the health industry development of. After VAT recovery, fertilizer prices on the basis of the existing environment, may cause the price to rise, the relevant state departments will be countervailing farmers through subsidies or other means, so as to rationalize the agricultural industry chain.
In addition, the recent relevant state departments began in 2016 export tariffs on fertilizer market research. With respect to the 2014 tariffs, the 2015 tariffs on fertilizer exports have achieved significant breakthroughs cancellation window period, help rationalize production and export business, while reducing the foreign short on export prices, so this round of market research and seek Opinions do not have much objection to this site will also matter sustained attention.