Between mid August, domestic urea market decline has not changed. In early August, the local area appear agricultural replenishment needs, Shandong, Henan and other places of urea factory price of small lift 30 ~ 40 yuan (ton price, the same below). However, the short-term price rise in the short term is difficult to reverse the low season trend, urea prices once again lower. Domestic demand off-season, enterprise price although serious upside down but no rational delisting, compound fertilizer and autumn procurement of raw materials difficult to urea positive, domestic manufacturers compromise Urea Export at a low price, to the domestic pricing brings is expected to decline in value, is expected to advocate produce an area to actual low-end ex factory price later this month may be dropped to 1050 ~ 1100 yuan.

　　Capacity out of too slow

　　Over the past ten years, urea market analysis has been accompanied by excess capacity, eliminate the topic of production capacity. Today, although there are exit capacity, but there is no lack of new devices to join, so that the net increase in urea production capacity. As of the end of 2015, the national total production capacity of urea in the country about 80 million tons. Excess on the industry's impact on the more serious, at first only the busy season, the off-season is not weak, until the evolution of the season is also weak, the off-season is more weak situation. Especially from the end of 2015 to the first half of 2016 this period of time, long-term lack of good urea market, the factory price continued to decline.

　　According to statistics, more than 90% of the urea enterprises belong to the state of loss, coupled with the country's preferential policies for the tightening of urea enterprises, the industry believes that the best time to eliminate backward production capacity. Even in the industry expected, the two quarter of 2016 there will be 1/3 of capacity due to funding strand breaks and permanently shut down. However, until mid August, the vast majority of enterprises after a round of alternate parking again after the resumption of production and plan in the near future parking enterprise said again drive. In fact, the progress of the production of urea eliminated the urea market has brought a new bearish space, and further drag on the market.

　　Abandoned the production of compound fertilizer

　　From late July, the industry will look forward to the end of July to the beginning of August, the traditional autumn compound fertilizer production to urea to bring new domestic demand. But until now, this round of expected urea market has not been started. Many people think it is "temporarily delayed", but I understand from the market situation, the wave just need still unknown. Small N fertilizer enterprises of compound fertilizer in autumn multi high phosphate fertilizer, nitrogen feedstock choice more broadly, as far as possible, reduce costs, will tend to use more cost-effective, compared to more than 1000 yuan of urea, ammonium sulfate or ammonium chloride at a lower cost. In ammonium sulfate, for example, belongs to the coal chemical products, around the supply of balance, ammonium sulfate Market in previous years, the compound fertilizer plant, the rare earth industry. Because of this year's rare earth industry discontinued more, ammonium sulfate to 300 yuan or so low supply compound fertilizer enterprises, although its nitrogen content is only 22%, but from the production of high phosphate fertilizer and cost consideration, urea or will be replaced. Therefore, the relevant informed sources said that the compound fertilizer enterprises in August the demand for urea has been negligible.

　　Foreign trade pull low domestic prices

　　Mmtc in India last week launched a new round of urea procurement tender, similar with the IPL just at the end of the tender, designated ports, purchases only 12 million tons, 8 ~ 9 for October shipment. Some analysts will be overwhelmed by the tender as a round of bidding follow-up replenishment behavior, and look forward to September ushered in the 40 million to 50 million tons of urea tender. From last week, foreign media price of urea, FOB China small particles urea although up to 190 ~ $191, and many 1110 to 1120 yuan mainstream set of rumors of price in Hong Kong, and the low end of the international urea FOB still below $180. From the price set in Hong Kong, impact on the domestic price of urea is quite deep, urea sales off-season domestic price often to set price in Hong Kong as a benchmark, urea producing areas of the markup inside has been despise to 1050 ~ 1100 yuan.