Experienced a slump some time ago, urea prices starting in the low consolidation, with another end of autumn agricultural fertilizer, the author analyzed the supply, domestic demand, exports of the three aspects, the conclusion is very optimistic about the prospects for light storage.
Let's look at supply. Early in August I had forecast domestic production of urea under the influence of the parade will remain stable, and therefore come to the conclusion of the relatively optimistic outlook, but unexpectedly the domestic urea production in August hit a record high. If there is no limit production in some areas, this data will be higher, indicating that domestic production has not been eliminated the old, while new capacity in another release. From the future trend, the effective capacity will be further improved: there are several sets of coal production in the fourth quarter head means, and sufficient southwest of natural gas supply, and natural gas prices are expected to have a strong, the gas head of urea enterprises operating rate to further enhance to create the conditions, which means that the domestic supply of urea increased pressure increase.
When the price dropped to a certain extent, it will inhibit the supply, so some people to stop production as producers if the price of urea on the basis of whether or not bottomed out, I do not fully agree with, the main reason is that short-term reductions, cut supply and demand can not be achieved the goal of balancing. Import, export and production data with last year for comparison, on the basis of urea production in August this year, the full year at least to reduce the nearly 8 million tons of production capacity, market opportunities likely to emerge, but there are a lot of urea industry due to financial problems and output Prices without troubling "perpetual motion machine" and therefore want the price to balance supply and demand is almost impossible to achieve the goal. Similar examples abound in China: Steel, soda ash, coal and so on.
Through the above analysis, we conclude that the domestic urea supply will continue to grow next year, will be the new normal losses or urea industry, but not the price bottomed out basis.
Let's look at domestic demand. Corn is the first large agricultural urea demand, reduced price of corn this year, while reducing farmers farming enthusiasm, on the other hand may increase the farmers for next year is expected to further reduce the price of corn, which will bring corn next year drop area, and it is judged that the urea demand is likely to decline next year agriculture, it is difficult to grow. National Bureau of Statistics data show that 1 - August real estate growth has dropped to 3.5% level, down 10% over last year, the lowest growth rate in this century, continued to fall late great possibility, that industry Urea demand first large - MILL demand may decline further. The positive potential future automobile exhaust denitration, but this is a gradual process, it is difficult to change the short-term supply and demand of urea market. Thus, next year domestic industrial and agricultural demand for urea will be faced with downward pressure.
Finally, look at exports. With annual export tariffs unity, making the international market game with Chinese urea expanded from four months to a full year, this year's August exports only 800,000 tons, the lowest in nearly three years. Compared with domestic dealers, traders grasp more comprehensive information abroad, they are more concerned about domestic production are in decline, not because of the loss of Chinese enterprises and hunters, while China's output decline is difficult to do precisely to, the international pressure on the Chinese traders urea prices will be more emboldened, plus limited Chinese urea cost competitiveness, production capacity and agricultural downturn in global prices of urea this year 10--12 than last year's export volume a substantial decline, the annual export volume is difficult to sustain growth next year.
In short domestic urea market next year will face more severe oversupply pressure.