2015 years had just passed, although urea prices is not satisfactory, especially in the second half of the urea continued weakness in the market, which makes the market negative atmosphere, but "the teacher of the previous lessons for future generations", 2016 we need more summing up experiences and draw lessons, prepare in advance to face more intense changes in the market. Below China fertilizer network analyst Xiao Sun on the following aspects to analyze and predict the trend of urea market in 2016.
Domestic and international policy adjustment
Domestic influence
Although we know that urea industry is gradually market, national policy level adjustment of urea market influence is gradually weakened, but in urea cost state monopoly price policy adjustments involve still need we pay close attention to the. We know that since April 20, 2015, urea production electricity policy phased out, which resulted in an increase in urea production costs, within a period of time the factory price of urea rise 40-80 yuan / ton, but the price of urea rose lack of stamina, shorter duration, into the urea prices in June began to fall. At the same time the price adjustment is a phased adjustment of, price adjustment in Zhejiang area, for example: April 20, the first step in 2015 started urea electricity on the basis of the original price per kWh of electricity increased 0.906 angle. The second step is on April 21, 2016 begin in 2015 urea based on the price of each power increased 2.8 angle, and urea with the electricity price adjustment of the two-step strategy. As can be seen, the 2016 the price adjustment will be greater, 2015 3 times, reference price adjustment in 2015 after urea market trend, we expect 2016 price adjustment or will to bring the positive short-term price of urea, urea prices may have a larger space.
International influence
International commodity trading prices continued weakness in 2015, international urea prices are inevitable downward, which has a close relationship with the Fed's interest rate hike. 2015 Federal Reserve interest rate hike in the negative performance of commodities significantly, crude oil and other energy commodities prices continue to fall, indirectly led to the chemical industry downturn. According to economists analysis, in 2016 the Federal Reserve or will have 4 interest rate adjustments, which will continue to affect the international commodity formation, may lead to more pressure on China's urea export".
Supply and demand relations
supply
Although the urea overcapacity has become a cliche of the topic, but we still have to look at this issue properly, after a careful study of the relevant data can be found, as of the end of 2015 China's urea production capacity excess amount about 600-1000 million tons, in addition to 2016 and about 600 million tons of new capacity release, no significant increase in demand, 2016 China's urea production capacity excess amount is estimated to be close to 1200-1600 million tons, which will continue to exacerbate the urea market adjustment of the industrial structure. So in the process of competition in the market environment is not up to the old production process backward production capacity is bound to withdraw from the stage of history.
demand
China's agricultural and industrial demand for urea in 2016 will not have substantial changes, although 2015 agricultural product prices in the doldrums in a certain extent, dealt a blow to the peasant farming enthusiasm and indirectly make agricultural dealers prepare enough fertilizer confidence, downstream purchasing wait-and-see mood is strong, but as a with farming for the agriculture country, agriculture of urea demand does not have significantly reduced, which will still is main urea market demand. But there is no denying that the adequacy of the supply of urea to allow dealers to prepare fertilizer more cautious, the situation will be less and less in advance of winter reserves, the price increases in the past season will be more and more small.
Raw material Market
We know that the domestic coal as raw material of urea production enterprises accounted for about 67% of the urea industry, so a large extent, the market trend of coal will produce good or bad performance of the urea market. Relevant statistics show that as of the end of 2015 the total size of the national coal production capacity of 57 tons, while in 2015 the total coal consumption of 35 tons, China's coal production capacity of 22 tons. For a market has been completely coal industry, 22 million tons of excess capacity means 2016 will is coal industry 'capacity to more intense year, to play a "market Daobi mechanism, 2016 coal prices there will be downward space. Bad raw materials market although the urea production costs continue to decrease, but it also leads to urea market competition is more intense and 2016 urea market will price with the king, low production cost, advanced technology, manufacturers will quickly occupy greater market share.
Comprehensive analysis of the international and domestic policy level, supply and demand relations and the three aspects of the raw materials market, we found that in 2016 urea market is still not optimistic. Although the increase in electricity prices will of urea prices bring some upward momentum, but the rebound underpowered, the market difficult long-term sustainability, international commodity market downturn will continue to form the bad performance of the domestic market; the release of new capacity makes the market competition more intense, to speed up the elimination of backward production capacity; in the downstream demand no significant increase in the, preliminary estimates in 2016 the factory price of urea or in 1150-1400 yuan / ton floating between. In a word, we analyze and predict that in 2016 the urea market will be the dominant factor in the negative factors, the process of industrial structure adjustment will be more rapid.