Since the domestic urea prices since mid July rose fell, around the market demand weak, enterprises generally confined to the Fed marketing way, very passive. At first the dealer and the amount of storage is antithetical couplet recognition, participation, but with the price of urea producing areas have fallen below 1500 yuan (ton price, the same below), especially recently issued an enterprise in Henan, Jiangsu's provisional price to launch priced only 1410 yuan, the downstream becomes not so calm. Dealer price game on the Fed, or low-cost buyout practices, showing further bearish view of urea market outlook.
The current international price quotation is too low
In the past, the end of the season of traditional agricultural fertilizer season was the purchase of raw materials for compound fertilizer enterprises, which served as the domestic demand for digesting urea for 8~9 months, but this year the situation was unsatisfactory. At this point, urea prices are high, compound fertilizer enterprises wait and see, postpone the purchase. There are also companies with ammonia and urea fertilizer in autumn substitution, high phosphorus ratio, the lack of support for the urea market.
In previous years, Urea Export is also the autumn hot topic, can provide reference price, but this year, the export situation is grim, the mainstream of international market price and India at the end of a new round of bidding will point to the urea export price below $200, compared Chinese FOB price of $224, there is still a certain gap.
In the decline in the market price of urea difficult bottom line. Considering the needs of agriculture from the angle, dealers began to store antithetical couplet objection, the factory take the goods also will be slowed down; if considered from compound fertilizer production, fertilizer terminal enthusiasm is not high, the low price of crops this year, fertilizer demand outlook is not clear, the enterprise will consider reducing the cost, the demand for urea must be compressed. Fourth quarter industrial demand, from all walks of life media feedback on the property market policy, the rubber sheet industry is difficult to improve during the year. Weak domestic demand failed to provide the appropriate indicators for the current urea, and the psychological orientation of the downstream manufacturers has been below the cost line. As far as the international market is concerned, although the reference price is given, it will be meaningless for China to set the Hong Kong dollar at 200 U. S. dollars offshore for less than 1300 yuan.
Short term operating rate decline is not easy
The current price of urea fell into the channel, or decline further, pay attention to the industry operating rate, expected prices stabilized. According to statistics, following the late June, the national urea enterprises operating rate callback to 60%, after nearly a month to maintain a slight concussion, hovering at 58% - 60% level.
With demand weakening this month, some industry insiders are holding an excess of expectations. In other words, the market is more willing to use the operating rate down, so that the price of urea stabilized. However, the reality of the problem lies ahead: not to say that August is not a traditional parking period, even if parking will be seriously upside down costs as a precondition. But at this time, Shandong, Hebei, Henan 1450~1500 yuan ex factory price is still higher than the industry recognized mainstream urea enterprise cost line. In other words, unless enterprises "carry forward high consciousness" limit production value insured. The move is likely to be months of continuous parking, or even be eliminated early. Believe that such a possibility may not exist. Therefore, at least in late August, the operating rate is difficult to decline significantly.
Synthetic ammonia urea complex sales decline
Some industry insiders pointed out that the purchase of compound fertilizer enterprises in Hubei and other places has raised the price of synthetic ammonia. More and more urea enterprises directly sell synthetic ammonia, also can be understood as reduced urea production in disguise. I understand that the sales of synthetic ammonia urea enterprises have increased, but this is also the market Yiyongershang overwhelmed, this week has seen a callback trend. Synthetic ammonia and urea have a certain substitution in the raw material purchasing of compound fertilizer. Under the condition that the total demand is not raised, the price will be game by the market whether the enterprise is selling ammonia directly or supplying urea.
The price of urea no bottom line, from the point of view of the current weak domestic demand and low export prices, with the expansion of fed marketing, the market continued bearish outlook, the price was down to or will meet the cost line. Expected in mid August, the main producing area of urea prices will fall to about 1350 yuan.