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Urea sways from side to side downstream feeling helpless
Time:2018-12-24   Read:600second  

At the beginning of this week, urea quotation increased due to the tender for 4.15 million tons of new dilute storage of fertilizers and temporary overhaul of some large plants in Shandong Province, but the overall urea market showed a certain decline after entering Friday. At this stage, the urea receiving price of compound fertilizer enterprises in Linyi area has been adjusted to 190-2010 yuan (ton price, the same below). Although urea has a higher rate of price adjustment compared with other fertilizers, the urea quotation has a certain decline. There are still some distributors who can't eat the fast pace of urea market. Influenced by many factors, according to the urea held by distributors now, the latent demand of urea is relatively large in the later period, but urea prices are frequently adjusted. The lower reaches of urea "love and hate". Although winter storage has not fully entered the peak season, the demand should start in terms of time, through and industry. After internal consultation, the current urea swing situation is mainly caused by the following aspects:

First, demand is relatively weak. On the one hand, the downstream industrial market is affected by environmental protection inspection, and the overall start-up is limited. For example, recently Shandong issued an orange warning of environmental pollution. Linyi compound fertilizer enterprises have entered the phase of gas shutdown again. In addition, after the production of Shandong urea plant gradually returned to normal, the overall supply of the market has increased, combined with the general sales of compound fertilizer, and the low-price supply in the early stage has continued. On the other hand, the enthusiasm of downstream purchasing is low; on the other hand, the agricultural market is mainly on the wait-and-see. Because urea quotation is in a high operating state this year, the purchasing of urea by agricultural distributors seems relatively cautious. Even some distributors sell urea at a relatively low price when urea quotation rises this week. In addition, the Xinjiang agricultural corps are facing reform, and the local market demand is general. Agricultural markets used to wait at least until after the Spring Festival before they could sell, but it is still a bit too early at this stage.

Secondly, the supply is relatively large. Although the overall start-up of urea has dropped to less than 50% in recent years as domestic urea gas-head enterprises have entered the phase of shutdown, after all, the downstream market demand is limited, and the current market consumption is small, and the social stock backlog is large. According to the recent market situation, if the compound fertilizer enterprises start operation as before, and the recent urea supply won no significant reduction, supply pressure is expected to be reduced. It will be further enlarged, and recently urea in Xinjiang is also being sold out of Xinjiang. Although enterprises intend to increase, they have no intention.

Finally, cost support is relatively weak. Although the recent start-up has been lower and the average cost-sharing of urea enterprises has increased, according to the current sales price, the enterprises still have a certain profit. If the urea sluggish market intensifies in the later period, some enterprises are likely to enter a price war, and the price of urea will still fall.

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