Domestic urea market ups and downs are the bottleneck, the industry tends to high cost and low operating rate will bring good support to the market outlook. The author believes that the urea market in December to maintain a high level consolidation mostly weak trend, while urea supply is expected to continue into next year good spring.
Policy implications are continuing
From the second half of this year the urea market, directly affect the policy of urea industry itself seems to be limited, urea enterprises overcapacity problem is the cost of a commonplace talk of an old scholar in "dead beat". According to the latest statistics of China Nitrogen Fertilizer Industry Association, in early December the national urea enterprises operating rate of only about 51%, and this state has been going on for several months. In short, the urea industry's own supply side adjustment has been ideal. October to early November, domestic urea prices rose more than 300 yuan (ton price, the same below).
The reason why the main domestic urea quote rose to 1500 ~ 1550 yuan after no new high, apparently its upstream and downstream by a series of policy adjustments to suppress. The coal industry since Needless to say, in mid November for the price of coal, coal for railway transport capacity adjustment, release of pre shutting down coal production capacity, the three aspects of the policy can effectively restrain the momentum of rising coal prices, and then spread to urea, urea prices lost power; the lower reaches of Hefei, plywood industry complex recently by environmental protection policy, general face parking production situation. With the anti haze measures in most parts of the northern areas of the implementation, not only the downstream factories limited, urea enterprises could not escape the fate of industrial demand limited production, bearish triggered, restricted urea prices continue to.
Favorable factors still a lot
Since mid November, the domestic urea market presents alternating ups and downs. Weak price new single deal, some dealers sell low inventory, urea upstream and downstream policy constraints and other unfavorable factors, making urea prices frustrated upward. However, urea fell less than expected, the actual price of the main producing areas remained at 1360 ~ 1400 yuan, after a new round of rebound occurred. As of December 12th, Shandong, Henan, Hebei, Shanxi urea factory price has risen to 1450 to 1500 yuan, depending on the specific transaction orders given more or less anxiang. Demand at this time mostly from Agricultural Winter reserve fertilizer.
In fact, more than half of the domestic agricultural circulation enterprises urea market in the first quarter of next year's supply situation with high expectations. Urea industry itself starts continued low, and affected by various unfavorable factors, production situation is not optimistic. If you continue to maintain the current 51% of the operating state of the downstream market, stocks will continue to stress to spring.
Of course, there are no shortage of urea cost side support. The domestic coal price is the main supply policy of suppression, but the coal chemical enterprises purchasing domestic heating, coal prices remain high steady. In addition, after the release of natural gas prices, not only gas prices, supply is also subject to seasonal impact on gas urea production enterprises caused great constraints. Visible, urea market still supply side and cost side positive support.
Wait and see the situation in the market outlook
Although the recent emergence of urea market V font trend, nor can dilute the downstream market sentiment. Industrial fertilizer requirement by environmental policy, take the goods weak since Needless to say; agricultural reserves start is still slow, the dealer is the basic attitude of preparing fertilizer "55": don't think it necessary to light storage dealers is a reference in previous years operating experience, have prepared fertilizer dealers to the game more favorable price. Urea enterprises, there are cost support, under a certain amount of new single sales, coupled with their own operating rate is not high, there is no need to over price compromise.
In fact, the current market bottomed, urea market is more likely to temporarily in the "price balance", namely the price of urea high consolidation, but not much turnover situation. Some industry insiders judge, December urea market for weak trend.
The short-term speculation factors include: the Spring Festival approaching, the provincial shipping of India urea; or in the near future to launch a new round of bidding will be released at the end of urea; urea export tariff adjustment policies; another is the current upstream raw material coal and natural gas supply can be improved. I think, perhaps because the transaction slowed down, it is more likely to supply urea positive continuation to the first quarter of next year.