The urea market in August is doomed to be restless. The domestic market is affected by environmental factors, demand is low, supply is down, prices are falling step by step, so that only a month time, the domestic main production area of urea prices have fallen or fell below the cost line. Into mid August, the domestic urea market demand has not changed. Although the international price is on the rise, there is still a gap between China and Hong Kong, and the export situation is uncertain. But it is worth noting that, the main production area of urea prices below the cost line, there have been signs of stabilization, once the market demand, prices or will rebound.
Local prices are still down
"After a substantial decline early, urea prices have stabilized signs." Rising group fertilizer sales company general manager Liu Weichang told reporters. At present, the Shandong region's urea price decline has slowed down, the mainstream factory quotation at 1460-1490 yuan / ton, the actual transaction price at 1450-1460 yuan / ton. Although some areas still decline, but overall, the decline in space is not large.
Anyang surplus fertilizer company regional manager Zhang Mingjie said in an interview, after the preliminary adjustment, the current urea prices in Henan region remained stable. "Henan mainstream factory quoted price 1500-1520 yuan / ton, outside the price of 1450 yuan / ton, the industrial price of 1430 yuan / ton, basically has dropped to the cost line near."."
At present, the main production area of urea prices have fallen near the cost line, but the market is still showing a decline, mainly in some high price areas. Deputy general manager of Linggu Chemical Co. Ltd. Ming said that the current Jiangsu area urea mainstream offer 1560 yuan / ton, prices last week fell 50-60 yuan / ton, the actual transaction price has fallen below 1500 yuan / ton. Jiangsu, Anhui and other places due to "pre urea prices are relatively high, with the decrease of market demand, the price decline is relatively large, but the current price and the price of the main areas has been basically flat, enterprises basically no profit space."
Overall supply continues to decline
As the current price of urea has not made money or loss for enterprises, the overall supply of the market has shown a downward trend.
Liu Weichang said that the current coal station price has risen to 1100 yuan / ton, according to the full cost accounting, urea production has been a loss, so most of the enterprises have turned to the production of liquid ammonia, liquid ammonia now price in 2300-2400 yuan / ton, equivalent to the price of urea is 1650 yuan / ton, so basically can transfer liquid ammonia in addition to already converting factors, the recent environmental inspections on urea utilization rate is affected, overall, due to the current price of urea is still a decline, so the supply will continue to reduce.
Zhang Mingjie believes that the impact of cost and environmental factors, the overall supply of urea showed a downward trend, but little room for decline. "The current decline in urea prices, in fact, the relationship between supply and demand has been little, mainly sluggish market demand. The supply of urea in Shandong and the south is already low."
"At present, the urea market is the only lack of good demand pull." Liu Weichang said, at a time when the use of fertilizer in the off-season, agricultural fertilizer ended, and prices fall below the cost line, leading to supply decreased, and industrial demand, due to the impact of environmental factors, the current small compound fertilizer enterprises and plywood factory is in shutdown state, so even if the urea supply continues to decreases, prices are still showing a downward trend, mainly is the lack of real demand, once the industrial compound fertilizer and plywood factory to demand the release of urea prices will rebound. "Although the environmental factors are small compound fertilizer enterprises greater impact, but large scale compound fertilizer enterprises due to environmental standards, the market outlook is still expected demand for urea, and plywood factory is also a positive transformation, for the early resumption of production."
Afternoon or usher in a turnaround
Liu Weichang believes that the current market is not actually urea positive factors, the P and K has shown a slightly rising trend, and the Hefei market also appeared out of stock phenomenon, so the market outlook is not too pessimistic and urea, and international prices recently showed a rebound trend, although urea enterprises in Shandong do not have the ability to export, but Xinjiang some enterprises have a cost advantage is still likely to export, this can also alleviate domestic market competition pressure.
Tan Chengming believes that the current price may still have room for decline, but the space will not be too large. "By the domestic market demand, the first half of the urea price volatility is not, urea enterprises better profitability in the second half of the year, due to less demand for compound fertilizer enterprises, the current price is difficult to support, even if the supply has decreased significantly, but because the market is not a demand, so the price is still in the bottom."
According to Zhang Mingjie, the current price of urea has basically bottomed out or at the bottom of the region. "Urea prices showed a decline, while coal prices continued to rise, so the price of urea basically fell below the cost line, the enterprises will be very price, static and other market demand pull.". From traders point of view, the recent increase in inquiry, the agricultural market is also a small number of fertilizer. In the current market consistent pessimistic circumstances, if traders wait for hunters to pick up, the urea market or will usher in a turnaround."