2016, China's urea market experienced price trough, domestic manufacturers look forward to the first quarter of 2017, the international market has improved, but the recent performance of the urea market is not satisfactory. U.S. new capacity put into operation, the first round of bidding in India also failed to bring good news, manufacturers of urea market is very confused. In March 30th, Argus FMB international market analysis meeting, the participants believe that the global urea prices in 2017 will be stabilized to pick up, the price will not be lower than $200 (ton price, the same below), in 2018 the market will be a rising trend of urea.
Argus nitrogen weekly editor Steve Mitchell said that in 2017 the global urea enterprises operating rate will reach a trough, and then picked up, is expected to start operating in 2018 and the price recovery will increase. According to Argus forecast, since mid 2016, China's urea prices have bottomed out, in 2017 the overall price of urea will not be lower than last year's level, according to China's production costs, the international price of urea FOB price of $200.
Peronas marketing and sales director En. Hisham B Mohamad international urea price forecast is more optimistic. He is expected in 2017, the overall price of urea in the 220~225 U.S. dollars, by the end of 2017 in 2018 will exceed $300 urea, and prices are on the rise. Hisham said that from 2017 to 2018 the international urea overcapacity will gradually ease, and more reasonable, more new capacity for the rationalization, urea supply and demand more balanced, and South Asia and the India region of the demand will grow, the international market will usher in good.
For domestic manufacturers, more concerned about the domestic urea production and export status. According to the Deputy Secretary General Gao Li introduced Nitrogen Fertilizer Industry Association, in January and February the average daily production of 145 thousand and 500 tons of urea, March average daily production of less than 150 thousand tons, a decline of 26%, is expected in 2017 annual output of 55 million tons, basically the same as the national consumption. According to the nitrogen fertilizer association predicted that in 2017 the domestic apparent consumption of urea at 55 million ~6000 million tons, of which about 38 million tons of agricultural demand. In accordance with the current effective capacity estimates (85% operating rate), urea production of about 60 million tons.
Xu Deren, general manager of Sinochem International Trade in the report pointed out that in 2017 China's exports of urea fell, 1 in the first two months of urea exports nearly 790 thousand tons, down by 61%. According to the nitrogen fertilizer industry association predicts that this year, the domestic export volume of about 5 million tons of urea, urea exports in the first quarter of about 1 million tons, compared with the same period in 2016 to reduce the amount of 1 million 960 thousand tons.
It is understood that the domestic urea will have 3 sets of effective production capacity, about 1 million 600 thousand tons of production, is expected in 2017 the total domestic urea production capacity reached 78 million tons. Due to the impact of electricity prices, coal prices and freight prices and environmental pressures, the cost of domestic enterprises will further increase.