Pre-Spring Festival Urea Situation Conjecture
Time：2019-01-24 Read：581second
Time flies. There is only one day left in 2019 and thirty-five days left in the Spring Festival of 2019. What are urea manufacturers busy with at present? What are the factors that influence the price trend of urea? Of course, the most crucial thing is the situation of urea market before the Spring Festival. How can our distributors benefit from this? What strategies should our manufacturers adopt in order to sell better?
Take history as a lesson! Let's review the recent urea market.
On the emand side, under the pressure of environmental protection and the slow digestion of the finished products of compound fertilizer, the delivery of compound fertilizer plants has not been too hot, and the price of urea in Linyi has been consolidated around 2000 yuan/ton; under the economic downturn, some plywood factories began to take holidays as early as early as December, most of them will take holidays after January 15; and the agricultural distributors and distributors will also take holidays after January 15. Continue to receive goods cautiously, in addition to the appropriate amount of goods to participate in the tender for desalinated storage on December 13, the time for winter wheat to be returned to green manure has been hesitant; on the export side, in addition to the implementation of India's last tender order, China is in the process of supplying, while India's new tender time is unknown, the price is unsupported, after all, China's offshore price has fallen to US$280 per ton and below. The price from urea manufacturers to major ports is only about 1815 yuan per ton.
On the supply side, gas-head urea enterprises have stopped production since early December. Only a few gas-head urea manufacturers in southwest China operate under low load. The start-up rate in Chongqing, Sichuan, Yunnan Province is only 6%. However, these gas-head urea manufacturers are still selling their stocks. The start-up rate as low as 45.26% in 2017 has not brought much profit to the price, let alone the nitrogen fertilizer association said on December 28 to ensure spring tillage. Fertilizer partial gas head urea enterprises may resume production at the end of January.
In short, the tender for 4.15 million tons of chemical fertilizer storage on Dec. 13 brought a little boost to the urea market, zero tariff on Dec. 24 brought a slight boost to all chemical fertilizer exports, and a slight shortfall in the return of gaseous urea enterprises called for by the Nitrogen Fertilizer Association on Dec. 28. Recent fluctuations in urea prices mainly occurred, with surface quotations ranging from 20 to 40 yuan/ton, which began to weaken after three or five days. In fact, we can talk about further expansion of space.
Looking ahead! That is the urea market before the Spring Festival.
_The biggest problem in the current market is the poor liquidity of urea cargo, the shortage of spot cargo in the hands of distributors at all levels, and the enthusiasm for new delivery. After all, the current price is only 100-150 yuan/ton higher than the lowest annual price at the beginning of August 2018. Considering the capital interest of long-term reserve customers in recent months, it seems that the risk of new acquisition is not high on the surface. The sale of urea goods has become a big problem. Industrial compound fertilizer plants and plywood factories have their own problems. They can only pick up their products at random. Farmers'grain can not sell at a good price. They are more and more unwilling to invest in fertilizers and take them in advance, let alone export. Prices are hanging upside down. New orders in quantity are really few, less than 100,000 tons. Bidding for light storage and zero export tariff are far from hydrolyzing the thirst, and can not help urea flow in the current market. Although the time of return of gas-filled urea enterprises is a bit ahead of schedule, it is bad, but the time of return depends on the degree of temperature rise, which can not be considered for the time being.
In the next month or more, before the fire is tight on January 20, urea enterprises will often find ways to pre-collect orders during the Spring Festival. Workers and farmers will also find the right time to get the goods. The price game will intensify. The small probability will be that the price is lower than that before the beginning of August (Shandong low-end turnover factory 1750-1760 yuan/ton). Probably the rate will be lower than that before the beginning of August (Shandong low-end turnover factory 1750-1760 yuan/ton). That is, the policies such as the factory's bottom-guaranteed pre-receipt have worked. After the factories have attracted some orders, they have temporarily stabilized. Then, if the situation is worse, they will reduce the number of orders to absorb them. Under the low domestic start-up rate, Shandong's factory output may fall to 1850 yuan/ton or a slightly lower level.
As for our distributors, we should take full account of the whole time from delivery to arrival of urea, and when farmers will pick up the cargo in cold spring weather with high probability of spring after warm winter, especially to avoid the period when compound fertilizer plants concentrate on purchasing raw materials for production after the Spring Festival. A small number of times should be the safest way to handle the cargo.
_It has to be mentioned that the overall economic environment is depressed, crude oil has recently fallen below $50, methanol, melamine, liquid ammonia and other related products upstream of urea are unavoidable, urea downstream exports, plywood factories, power plants are also affected, and their receipts are slightly less than the same period last year; in terms of supply, roughly speaking, the annual output of urea should be slightly lower than 2017, but some urea factories are now involved. Years more liquid ammonia, the final part of the flow to the compound fertilizer plant, the finished products processed with urea is also a competitive relationship, our distributors should try to operate as short as possible.
_Real price increases will occur, probably after the Spring Festival. After all, compound fertilizer enterprises will take urea one after another. It's only a matter of time. After all, there will be a gap in the spring Market under the low social inventory. However, the late spring cold after warm winter may make the fertilizer market come late and end quickly next spring. The urea price increase should not be large.
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