Since entering the middle of July, East China, North China, are starting to agricultural fertilizer, urea prices realized Lunzhang expectations. As agricultural demand improved in these areas, nearly two weeks after another decline in urea prices stabilized stabilized, Shandong, Jiangsu, Anhui, factory price rose 30 to 50 yuan (t price, the same below). But apparently the makers did not rally as the market price of the operation, only to draw a single possible. At the same time, also reluctantly called the current rally as "week market." "A week," referring to the period of fertilization, since I have clear support from only needs to cover short positions, it means the end of the fertilizer market will come to an end.
From the practical point of view, the East China first to start summer fertilizer, lower inventory inadequate supply tight. East China factory price of urea mainstream soon returned to 1720 ~ 1750 yuan. However, local people have Sanshiliuji Lunzhang market "lost battle plan" feeling, although the manufacturers profit, in fact, corporate retreat to protect themselves. In the next off-season market, the industry will receive more severe test, urea pricing outlook would be passive.
Seasonal export enterprises of different attitudes
The industry view was expressed that the huge Chinese urea volume, impossible to pull the international market, the determining factor is not the ups and downs of the domestic urea exports. I think that the existence of domestic agricultural demand peak seasons, this is the determinant of ups and downs.
Urea export tariffs in 2015 was changed only a uniform tariff throughout the year, while the concept of short season can not be ignored. According to statistics, from January to July, the National Agricultural urea amount of about 70% or more year-round demand, especially during the spring. If the downstream market feedback to the lack of inventory, then the price of urea will have support at all. 2 to May this year, around the spring market was significantly lower than in previous years, the level of urea stock over the same period, it has also become the main reason companies offer high.
And in the face of the international market in the first half bidding, the domestic price advantage is more obvious, it can be said that China supports the international urea price of urea. India can also be seen from the first half of the three urea before bidding, China has been under control of the pricing right to speak. The stick did come from the industry on the domestic market outlook optimistic expectations. Meanwhile, the international market, although not directly pull up the domestic price of urea through the procurement, but the manufacturer "Every Tender stir fry" approach can not deny the impact on domestic prices in the international market. In simple terms, the domestic agriculture is in season, export more like "icing on the cake", favorable prices of domestic demand is expected to provide the impetus and lead to higher price increases for export.
Domestic agricultural traditional off-season from late July until October or longer. During this time the weak agricultural demand, limited industrial demand, excess urea market. Factory inventory pressure to solve bound markdowns or early suction alone. At this exit like a "timely." During previous years, domestic agricultural season, no positive urea decline in value, export FOB prices as domestic sales and as a support of a few examples.
Exports will continue to expect the market surplus Game
Because of domestic agricultural off-season, the excess supply of urea is expected to inescapable, even though the industry has to be synchronized as possible production cut, but have some difficulty controlling production. The manufacturers, markdowns already put on the agenda. From the recent case of the implementation of India in June the tender can be discerned. Recalling India's fourth round of urea tender on June 19, a total reached 849,500 tons of orders, of which about 350,000 tons are sourced from China, FOB price of $ 305 - 307. At that time, before the end of the agricultural season, the industry is lower than in the selling price of the export orders are not good. However, by mid-July, many manufacturers have begun to actively stocking for this order, set in Hong Kong price can reach 1650 ~ 1670 yuan. The reason why big attitude change, apparently because the order except India, traders saw the highest single exercise price set in Hong Kong has dropped to 1,620 yuan or less.
The face of "market week" and the impact of nitrogen fertilizer urea market in June and July, and urea on the domestic outlook is difficult to have too high expectations.
In other words, the first half of the urea price indeed "active", but the surplus is expected in the second half of the domestic market or to allow pricing to "passive."