2016, urea industry reshuffle significantly accelerated, countries advocate of supply side reforms, in the performance of the urea industry more and more obvious, this year apparently become urea industry transformation and development of the start, the market outlook for the development of supply and demand still greater impact.

　　Production increased year by year

　　According to statistics, in 2016 1-7 months of domestic urea production was 34 million 930 thousand and 200 tons, compared to the same period last year increased by 5.17%. 2016 China's urea monthly yield mostly higher than the same period last year, production due to the increasing market oversupply situation is more serious, even in the season with a fertilizer, domestic urea market did not appear big rebound. Until now, the domestic market price of urea compared at the beginning of the year with more than the decline has reached 12.87%, around the year decline is reached more than 25%.

　　But in July, by the impact of poor market, a small part of the parking device, each big enterprise also have switched to the production, yield decreased gradually, is expected in the second half of the domestic urea market production will be significantly less than in the first half, but excess domestic situation in a short time or it is difficult to improve.

　　Demand decreased year by year

　　China's urea market apparent consumption over the same period increased substantially, but this is not representative of the domestic actual demand situation, resulting in table view of the main reasons for the increase in consumption is yield increased and reduction in the number of export, in fact, in the first half of the year 2016, China's demand for urea is reduced.

　　First of all, the country put forward fertilizer use zero growth plan, all for the policy to respond positively, to some extent reduce the use amount of urea; secondly, the country adjust planting structure, reduce corn planting area, it will be reduced to 50 million acres, whether planting soybeans or potatoes, corn, compared with fertilizer application decreased; third, natural disasters this year frequently, the recent flood disaster caused by the southern part of the region of crops or crop, which also caused a decrease in urea demand; fourth, the industry has been slow start lifting fertilizer, recently environmental protection efforts, part of the region is constantly parking, reduced the amount of urea industry demand.

　　Overall, 2016 the first half of the year, China's urea downstream demand showed declining trend, so although the apparent consumption showed a tendency of increase, but under the weak export, the so-called apparent consumption is the social inventory, both in the warehouse or in the hands of dealers, the are increase in the supply of, which also caused the even in the domestic season with a fertilizer and performance in the domestic market is still oversupply.

　　Late industry development trend

　　From the enterprise started to see, in July 2016 began to decline sharply, treasure island, according to statistics, in July the domestic urea market started in 63.38% rate, compared to the first month on month decline 10.45%, is expected to the latter part of the domestic urea production enterprises or will continue to cut production or shut down, so as to ensure the low, to ensure that can survive in the industry reshuffle, or it will be in the short-term urea industry development trend.

　　In the long run, large enterprises to continue to expand production capacity, small and medium enterprises to exit, or will also be a major trend. According to the understanding of the treasure island, the next few years, Shandong Ruixing chemical industry, Shandong Hualu Hengsheng chemical, Hebei Yangquan Coal Zhengyuan chemical industry, Henan xinlianxin fertilizer urea production enterprises still plans to put into operation the new coal chemical plant for the production of urea, and similar to the small and medium capacity or will not be not due to consecutive losses, and gradually withdraw from. And domestic large enterprises urea also in the implementation of out strategies, plans to in the urea plant of construction of Iran and other countries to seize the international market, large post enterprises fought in foreign factories or will become possible.

　　The second half of 2016, the market is still bearish on the price of urea, or has been in a stagnant state. In the long run, to capacity is imperative under the situation, traditional coal chemical plant will gradually be eliminated, urea industry future will Nirvana rebirth.