Since we judge that the final consumption of urea will not decline, the current decline in urea prices can only be attributed to a decline in the network reserve capacity resulting in poor product inventory transfer. With urea prices bottoming out last week, I am more confident about the market outlook.

Reason for a further decline in social inventory

Although there is no data support, it is certain that the social inventory in Northeast China has basically been digested and entered the replenishment mode, and the stock in other places is also declining. The decline in stock makes the force of the empty head weakened.

Reason two a further increase in demand

Agricultural fertilizer will start all over the country, and demand will be significantly higher than in March. Under the low inventory mode, replenishment demand will further increase.

Reason three market confidence is recovering

After experiencing a panic fall, the market confidence began to recover, and the number of people who continued to drop was few, and the reserve capacity of the network began to increase.

Reason four elimination of import pressure

If the bid of India reaches 1 million tons, it will support the price of urea in the international market in May, and the international market is not able to supply a large amount of urea to China. Importing urea into China according to the tender price of India, the merchants have no profit, thereby blocking the possibility of domestic import from two aspects of quantity and price.

Reason five no increase in output

Many people worry that the fall in coal prices will lead to an increase in the rate of urea utilization. The author believes that the possibility of increasing the production of urea is not very likely. From all aspects of statistics, the output of urea in the first half of April did not increase, which further proved the reasonableness of the author's judgement. Even if the late production increases, there is little chance of shortfall in the short term to fill the gap between pre gas shortage and carry over inventory.

Now is the bottom of the urea price the beginning of the rebound or the drop of the relay? In my opinion, according to the analysis method of stock, the demand of urea has just entered the stage of promotion from the point of time. The continuity of demand has no problem. The price of this wheel has not fallen to the production cost of the enterprise to rebound, so it is not lower than the cost LED foundation; from the confidence, the domestic market analysis article last week. Almost one side of the ground empty, in the case of lack of confidence, the urea market began to build up, so it is not the bottom up of speculative demand. Above all, I believe that the bottom of this round of urea is a reflection of insufficient supply, and is the beginning of a rebound, not a relay for falling.

With the decline in stock, recovery of market confidence, demand growth and the approaching of the use season, the urea price bottoming will increase the enthusiasm of the dealers to take compound fertilizer, promote the increase in the rate of compound fertilizer start, and further promote the rise in the price of urea. I still hold this view: holding urea in the first half is relatively safe.