After the Spring Festival, opening price of urea, although the price increases are not large, but this round of price hikes on the latter part of the market is of great significance.

The gas shortage in mid December last year, gas based urea enterprises the basic production of urea, took the opportunity to set off a round of price storm, a month rose nearly 400 yuan per ton. After a series of measures adopted by the relevant management departments, the price has been adjusted by 1/3 of the increase. Since then, urea has fallen into a popular market, but the price is a circle that does not rise. Summarize the reason, one is afraid of the policy to suppress the two market heights, the three is the fear of the resumption of production, the four is the fear of imports, five is a rigid demand, and even agricultural products low price considerations, the dealers can not reserve.

I love the market analysis together to verify each combination of data chain, industry chain and the chain of evidence, to ensure accurate grasp of the market. I recently analyzed the first half of 2018 the urea supply and demand situation, judging from the data chain angle, yield, increased imports and exports are difficult to make up half the urea supply gap, and this round of urea prices, providing further evidence of support for the analysis of this judgment before.

The basic facts of this round of price hikes are as follows: the first price of the region is Shandong, Hebei and Henan, the price of the reasons is the winter wheat agriculture demand, industrial demand has not yet started. As we all know, Shandong, Henan, Hebei is a large province of urea production, and the pursuit of fertilizer is only residential market demand, and the amount is not very large. Due to the high nitrogen fertilizer in wheat, the sharp decline in the amount of top dressing. In this case, the price actually time can last nearly 10 days, one is a reflection of the large capacity of urea is produced in the province, even the top dressing are not guaranteed; the two is that social inventory is very low, the lack of buffer (if the network urea inventory, dealers will first clear storehouse, factory price it is difficult to rise); three is that the demand for high inhibition is not obvious.

With this evidence, we went back to the market to determine the trend on urea. Since last November, the national agricultural consumption amount of urea and urea production is very low, even lower, to the end of March, there are 20 million tons of production. Although compared with previous years, the social inventory is seriously low, but the absolute value is still considerable.  We have already analyzed the reasons why the market is not as good as expected. Under the combined action of these factors and the absolute value of urea stock, the short-term market is still very difficult to make a great effect, and the callback is also possible.

Conversely, Shandong, Henan, Hebei etc. if the province even Topdressing Urea Production capacity there are self supply problems, then, in April, the national agricultural spring started, industrial demand has entered the peak purchase gap is not, urea would be further reflected? The author thinks that the great possibility to increase the supply quantity is the best means of suppression of prices. The government should not make regulatory actions within a certain price range to mobilize the enthusiasm of urea enterprises, so as to increase supply as soon as possible, and finally achieve the purpose of restraining price rise.

From the price of urea in this round, I saw the security for the situation is quite grim!