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The drop in urea prices is alarming
Time:2019-01-24   Read:565second  
In the past week of the New Year, the overall fertilizer market has not improved as expected. On the contrary, the trend of fatigue is getting worse and worse. Falling prices, light turnover and poor start-up are common in all markets. The fluctuation of raw material end market affects the progress of finished fertilizer market. At present, the winter storage market of compound fertilizer is basically stagnant. Although water-soluble fertilizer is in the peak demand season, the situation is also more difficult.

Raw materials market has been weak recently, among which urea prices have fallen again and again, bottoming out. Up to now, the mainstream urea ex-factory quotation in Shandong Province is 1830-1880 yuan/ton, which is more than 100 yuan/ton lower than that in previous weeks. At this stage, local environmental protection inspection is strict, industrial and agricultural demand is light, coupled with rumors that gas head urea enterprises will resume production in mid-late January, and subsequent prices are expected to continue to decline. In this way, the winter storage market can be described as "worsening the snow". It will be difficult to improve before the Spring Festival. At the same time, the water-soluble fertilizer market will also decline.

First, cost support has weakened. As mentioned above, local urea prices have dropped by 100 yuan/ton compared with the previous period. In addition, the prices of phosphorus and potassium fertilizers have also shown a downward trend in varying degrees. At present, 55% of the mainstream ammonium powder in Hubei is quoted at 2250-2300 yuan/ton, and the actual output can be around 2150-2200 yuan/ton; 52% of the total water-soluble powdered potassium sulfate is quoted at 3050-3100 yuan/ton. Based on the falling prices of all kinds of raw materials, the cost support of finished fertilizer will be weakened. In recent years, some compound fertilizer enterprises'quotations have declined steadily and implicitly. Considering the willingness to take goods downstream, water-soluble fertilizer enterprises begin to plan to adjust their quotations, and promulgate corresponding preferential policies.

Secondly, downstream demand is not strong. Generally speaking, winter is often the peak season of water-soluble fertilizer market, and the cultivation of cash crops of fruit trees in some areas will drive the trading activities of water-soluble fertilizer market. However, the overall demand in the lower reaches of this winter has not been released too much, and the market atmosphere is relatively calm. The first reason is that the price level of agricultural products is low and the grass-roots profit is limited. In successive years, when the prices of field crops have been depressed, the prices of cash crops have been the same, generally lower than in previous years, which has led to a sharp decrease in planting profits; the second reason is that the low-price supply is second-best. The lack of funds downstream, the loss of dominant position of high-price supply, low-price fakes have a chance to take, seriously disrupting the orderly order of the water-soluble fertilizer market.

Finally, start-up and delivery are limited. The downturn in the market is not only reflected in the price and demand, but also in the production and delivery of enterprises. After entering winter, the temperature dropped, the local environmental protection inspection intensified again, the production of small and medium-sized enterprises was basically stagnated, and the stock was slightly tight, so they had to restrict orders and maintain supply. This winter, rain and snow weather occurred frequently in some parts of southern China, roads were wet and transportation was not smooth, some enterprises were hindered in the delivery of early orders, and new orders were delayed and could not be reached, which seriously affected. As a result of the phased production and marketing plan, policies and natural factors have played a negative role in the development of the water-soluble fertilizer market.

In summary, under the unsatisfactory situation of raw materials, supply and demand, the water-soluble fertilizer market is temporarily stable. With the release of downstream demand and the clarity of raw materials market, the follow-up market may continue to stabilize.
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