On December 13, a paper entitled "On the storage of 4.15 million tons of additional fertilizers in 2018/2019..." News into the chemical fertilizer industry, like a drop of cold water into the hot oil pot in the industry burst open, because the "light storage and loss of money" forward market experience makes most industry insiders believe that the news should be difficult to be true, but on the 14th evening official documents issued all eventually come out; and as a market vane urea also made timely adjustments, 15 urea quotations in Shandong Lianghe and other places slightly increased by 10-10. 20 yuan (ton price, the same below), because the market is in a stalemate stage, the increase of this quotation also makes some downstream feel nervous, and urea prices are in a low state recently. Some downstream believe that the time for urea to reach the bottom has arrived, and plan to start purchasing, but the author synthesizes the downstream market demand and the previous year's dilution policy, the urea late market still needs some caution. The main reasons are as follows:

First, the actual demand of the downstream market has not been fully started. Judging from the situation of fertilizer preparation in the grass-roots market, the reserve of both compound fertilizer and urea is relatively small at the present stage, and the start-up of compound fertilizer enterprises is not too high, that is to say, the potential demand for urea in the later stage still exists, but whether it is the low-priced orders in the early stage or the wait-and-see mood in the agricultural market, it will impact the high-priced market of urea. From the perspective of spring sales in recent years, After entering the basic market, the price of most of the big fertilizer seeds is lower than the purchase price during the winter storage period, or basically equal to it. Considering the factors of interest, the profit of the distributors is very small. In addition, the fertilizer price is higher than the same period last year, the distributors are more afraid to rush into purchasing. It is predicted that the time of large-scale purchasing this year will be later than the same period in previous years, and the urea price will be lower than the same period in previous years. The price of urea has been adjusted frequently. It is still too early to say that the price of urea has reached the bottom at this stage.

Secondly, each factory has a certain profit margin. Influenced by the difficulty of demand, urea enterprises may enter the stage of price war. From the point of view of the cost of the current factory, urea enterprises have a certain profit in the current price. Even if the price increase is realistic, the demand is unsustainable. The factors of later price drop still exist, and the market can not reach an absolutely stable state. The price adjustment is still an unknown number.

Finally, the overall start-up of the enterprise is relatively stable. Recently, gas-head urea enterprises have entered the phase of shutdown, and coal-head enterprises in Shandong, Shanxi and other places have limited production. According to the production plan of gas-head enterprises in recent years, the possibility of further drastic reduction of urea start-up rate in later period is relatively low. According to the start-up of enterprises at this stage and the amount of orders to be issued, there is still a flow direction in a week or two, but some coal-head enterprises have resumed their lives. The overall supply of urea increased and the pressure of sales remained.

In summary, although the recent new tender for dilute storage has some favorable support for the urea market, the downstream market has a strong wait-and-see sentiment. It is expected that tender will not play a decisive role, and the later market still needs to maintain a certain degree of cautious operation.