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Urea: "Spring" is too far away for distributors to store in winter.
Time:2018-12-14   Read:566second  

At present, the urea market is still in a low ebb, the stock of factories is gradually increasing, and the prices of many places are still falling. At the beginning of this month, optimistic forecast was made that the mainstream ex-factory price of 1900-2000 yuan/ton in some main production areas was also "hit the face". Now the market price is generally hard to maintain at 1850-1980 yuan/ton, while the high-end prices are mostly concentrated in the northeast or southwest parts of Shanxi and Xinjiang. The quotation of regional manufacturer is much lower than this. Detailed data can be obtained from the member zone of China Chemical Fertilizer Network. Even today's prices have not been favored and recognized by distributors and farmers, but have increased the atmosphere of wait-and-see. From the recent communication with distributors, we know that distributors have little interest in winter storage and no great expectations. In short, "spring" (fertilizer in spring) is too far away, and it is difficult to store winter storage.




Most distributors still have pessimistic expectations on urea market. They believe that in the short term, no improvement is seen in agriculture or industry, the market with no market value will continue, the difficulty of sales of traders and factories will not be reduced, and the sales progress of large agricultural distributors will be difficult to maintain. How will the multi-factors affecting urea play when there is no gap between green and yellow?




The support of environmental protection and gas limitation is the "life-saving straw" of urea. The environmental protection inspection has never been relaxed, and the start-up of urea enterprises in many markets is limited to a certain extent, and the haze weather occurs occasionally in some areas during winter, so the production of some fertilizer and chemical enterprises will be limited. Moreover, although this year's "gas limitation" is not a one-size-fits-all solution, domestic gas-head urea enterprises have gradually increased their efforts to limit or stop production, such as some urea plants in Sichuan and Chongqing planned to stop or have stopped, such as a gas-head urea enterprise in Yunnan Province has also issued a stop announcement. Two factors led to the domestic urea enterprises operating rate barely maintained at about 47.41%, the supply of goods did not increase, but became the "life-saving straw" to support the urea market.




Coal price rise, liquid ammonia price stalemate upward, is another support point for urea. The increase of coal price is due to the restriction of environmental protection, especially the hazy weather. Therefore, the policies under environmental protection inspection restrict coal enterprises, which directly leads to a certain increase in coal price, and the cost of urea enterprises is still supported. In addition, there has been a lot of noise about limiting or stopping production of 2.66 million tons of liquid ammonia enterprises in Henan recently, and some liquid ammonia enterprises are limited. For example, the reference price of liquid ammonia in Henan increased by 30-50 yuan/ton to 2800-2900 yuan/ton, and there was a slight increase in the surrounding areas. Some parked urea enterprises were even more unwilling to open urea plants. Moreover, some areas in North China and East China would be limited by haze warning, and the price of liquid ammonia could be raised to support the production of enterprises. The center of gravity is placed on liquid ammonia.




but the negative factors are more intensive. Firstly, the low price of agricultural products such as grain and vegetables, the poor income of farmers, and the early use of fertilizers, most of them take the attitude of "picking as you like"; secondly, it directly leads to the "crack" situation of large agricultural dealers, although the low inventory, but the purchase of large traders is also to determine the purchase plan to prevent risks; thirdly, the sale of plywood factories and compound fertilizer factories. Poor, but also constrained by environmental protection, low start-up rate hovering, raw material procurement volume is small and enthusiasm is not high, resulting in low urea prices.




Generally speaking, the low urea market is a fact, and the price game between manufacturers is becoming more and more intense. Considering that the time for fertilizer use in spring is too far, it is more difficult to store it dilutely, distributors are gradually pessimistic, and price concessions are constantly made. It is expected that the urea market will still be in a light demand situation before the end of the month, and there is a risk of price stalemate.

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