Yesterday's India bid opened, the industry has placed great expectations, hoping to alleviate the recent price decline and inject some heat into the market. The total amount of this tender is over 3.6 million tons, the lowest quotation for CFR333.73 US dollars/ton for the West coast, 335.19 US dollars/ton for the East coast, and 318.19 US dollars/ton for the Chinese offshore price. Without considering the profit of intermediaries, the price for urea manufacturers in China to some major ports is about 2083 yuan/ton. At present, the urea price in Shandong Province is about 2083 yuan/ton. Mainstream ex-factory quotation is around 2070-2090 yuan/ton, domestic urea price has no advantage, and the cut-off bid is 21 days, if we consider the number of successful bids, there are still variables; so it seems that the Indian tender boost effect on China's domestic urea market seems to be thunderstorm.

At the beginning of India's bid opening, domestic urea manufacturers remained on the sidelines; however, if the export market failed, the focus of attention before the end of the year would still be on the mutual game between supply and demand markets of urea enterprises, including environmental protection inspection, restrictions on production of urea enterprises, whether the demand is bottom-reading or bottom-reading. Continue to wait and see.

Firstly, it is difficult to start urea construction because of environmental protection and gas limitation. The so-called pressure has power, and indeed, these pressures have become good supporting factors for urea. The round-robin inspection of environmental protection, especially after heating in autumn and winter in the northern market, is often troubled by haze weather. Under the normal inspection of environmental protection, the start-up of some urea enterprises will be often limited, such as the reduction of production load of urea enterprises in eastern and central China, and the requirements of safety accident inspection. Individual urea enterprises have to stop for a long period of time; recently, natural gas has become one of the focuses of attention in the urea and other fertilizer market. In the final analysis, natural gas supply is tight, and many urea enterprises with gas caps are limited to gas and high price gas, resulting in greater pressure on production costs, and some enterprises are forced to limit or stop production, such as Sichuan, Chongqing and Inner Mongolia. Some urea enterprises in Mongolia, Yunnan, Gansu and other places have stopped one after another, and some gas-head urea enterprises are facing stopping in the later period. Many factors have led to the continuous reduction of the latest supply of urea in the market. According to the statistics of China Chemical Fertilizer Network, the overall industry start-up rate of urea enterprises has dropped to only 50.01%, and according to the above factors. In terms of the degree of restriction, it is expected that the start-up level of urea will continue to remain at or below this level in the future, which provides the most obvious favorable support for the vulnerable urea market.

Secondly, the demand performance of workers and farmers is not good, and the terminal stimulation is not started. The weakness of demand is the biggest weakness of urea at present. After the Phosphorus and Compound Fertilizer Conference, the market is still quiet, the cost pressure of compound fertilizer enterprises is high, and the sales situation is not good. Some low-cost alternative raw material fertilizers are still the hot choice. High-price urea naturally retreats behind. In addition, some compound mast factories have reserved a certain amount of low-cost raw material fertilizers, which have recently arrived in succession, leading to the current high price. Price urea shipment is not smooth; farmers in agriculture are conflicting, and the total inventory of urea in dealer level is large. According to the market, such as urea in Guangdong market is light, agricultural companies have more inventory, and the total inventory of urea in grass-roots market may be as high as 140,000-150,000 tons. No place to place, in the off-season will be with a random attitude, no matter how temporary incentive terminal procurement enthusiasm.

Thirdly, the market of liquid ammonia and methanol is not good, urea is obviously affected. Recently, the domestic market of liquid ammonia and methanol is also suffering from the same situation of urea. Affected by haze weather warning such as environmental protection inspection, some ammonia enterprises start to work at a low level. The sales situation of downstream products of liquid ammonia is poor and prices have fallen sharply. The liquid ammonia enterprises are under the pressure of cargo and prices are constantly falling. The price of methanol has fallen even more obviously. For example, the ex-factory price of crude alcohol is about 2300 yuan/ton, and the refined alcohol is only about 2500-2800 yuan/ton, and it is still falling. This does not rule out that some enterprises will adjust the production focus to about 2500-2800 yuan/ton. Urea production.

Generally speaking, India's tendering is not the only factor determining the trend of urea. Weak demand is its fatal point. The downstream market is fearful of high prices and low storage risks. Watching carefully for urea, urea enterprises are expected to make some price concessions and absorb orders in the future; however, due to gas limitation, high prices, environmental protection and other aspects. Restrictions have led to low production loads, pressure on enterprise costs, and to seize the breathing time before India's bid closure, urea prices are moderately strong.