In the first half of the calendar has been turned over, the urea market in the first half of the overall volatility, but the overall price of a slight upward trend, and there has been no big ups and downs. Entered in July, North China is about to usher in corn top dressing, urea price interpretation of how to attract the attention of the market.
Factory prices are at risk
The top dressing of corn in July is worth looking forward to urea market. After entering July, although the market was smooth, prices did not rise significantly. Henan Jin Kai Group Yang Tongyu, deputy general manager of the extension of the Sinochem Fertilizer Company Limited told reporters: "at present, the agricultural market in Henan has gradually started, the overall price of urea remained stable.". As the dealer's pre shipment quantity is insufficient, so the enterprises take goods relatively well, but prices remain relatively stable."
Yang Tongyu explained that since June, the supply of urea market is relatively adequate, so companies are currently relatively cautious price increases, mainly due to market acceptance of the decision. "The basic market wholesale price of urea is maintained at 1700 yuan / ton, once the price increases, the dealer may choose not to take the goods or sales of new urea products, this certainly will increase the company's pressure. On the other hand, the price of agricultural products is still relatively low, the enthusiasm of farmers planting is not high, but also squeezed the dealer's profit margins, so even if the market demand, corporate price adjustment is relatively cautious."
Relative to the Henan market, the supply of urea in Shandong this year's overall low, some enterprises are still in production maintenance, and supply of the main supply in June in Jiangsu, Anhui, the Northeast market, so at present not only the stock market is low, but the supply is relatively low. Shandong Hualu-Hengsheng Limited by Share Ltd marketing specialist Jin Xuefeng said, the current mainstream Shandong area factory price in 1580-1610 yuan / ton, because the supply of the regional market of Shandong is not the same, the price also has a certain gap, but overall, the recent price changes.
The coal turned up
In June, the urea market remained stable as a whole, while the increase in coal prices increased the pressure on urea enterprises. Yang Tongyu said that the current price of urea for urea enterprises, most enterprises are still not profitable, so coal prices on the price of urea formed a strong support, but for urea enterprises, but increase the cost of production.
According to the Bureau of statistics, May coal production 297 million 779 thousand tons, an increase of 12.1%; from the output data of state-owned key coal mines, the data in early June compared to early May has increased, but still less than 5 months late, and the average daily output in May than in April there are still 2.2% of the fall. Overall, the main reason for the rise in coal prices is the restoration of supply less than expected.
With the hot weather in June, the demand for coal has picked up, and the price of coal has gone up again. It has completely ended the decline in the previous two months, and the recovery rate is slightly above the market expectations.
Jin Xuefeng said, from a cost point of view, coal prices indeed for urea price formation support, but also bring pressure to the urea business, once the coal rose more than urea increases, will break the current pattern of the profit and loss balance.
Although the short-term rise in coal prices, but the coal industry is still firmly push forward to capacity, so the possibility of short-term coal prices continue to rise is unlikely, but the cost of the support of urea prices can not be ignored.
July is not very risky
"Tight supply but not short of supply" may be the key word in the July urea market, which will determine whether the urea market will continue in July or June.
Yang Tongyu said, July is the main fertilizer season in North China, affected by this, the price of urea will not appear ups and downs, or will maintain relatively stable operation. Jin Xuefeng believes that in July the price of urea throughout the country due to the supply of different, will show a different trend, but the overall risk is not great.
From the price of urea in the first half of the trend can be seen, the main producing areas of urea prices remained at 1500-1700 yuan / ton range, once the price fell below 1500 yuan / ton, will pull up quickly, but rose to 1600 yuan / ton, the market stalemate. At present, although the urea market still has room to rise, but the range is limited. The urea market in July was driven by fertilizer and cost support in summer, and the overall risk was controllable. Will the price fall in August after the end of the summer fertilizer use? It's too early to predict, but beware of risks!