Urea Bidding in India is Necessary but Necessary
Time：2019-01-24 Read：561second
First of all, review the progress of India's tendering time: on the evening of January 9, India MMTC just released a new round of indefinite tendering in 2019, requiring goods to be loaded before February 28, the closing time is 14:00 local time on January 16, and the tender validity period is January 13. India's MMTC urea import tender was closed on January 16. A total of 22 bidders participated in the tender, with a total tender volume of 2.9 million tons. The lowest CIF quotation of US$295.9 (ton price, the same below) on the East Coast of India. It is rumored that more than 800,000 tons of labels will be printed. According to the current exchange rate, the ex-factory price in Shandong is only about 1,750 yuan.
Although the Indian tender excludes the supply of goods in Iran, the domestic urea in China is in the wait-and-see stage, and the downstream cargo is relatively poor. In addition, near the Spring Festival, the downstream construction and shipment are entering a difficult period. This wave of Indian traders is operated steadily and accurately by merchants alone. Although some industries believe that the printing of bids is so low, there are still some favorable support in China, such as in mid-2018. China only exports more than 2 million tons of urea, the impact of international urea on China is gradually weakening, and the decreasing urea production capacity has also weakened the pressure of the domestic market and the potential demand is larger, there is no need to export urea at a low price at home; but the author concludes that the urea bidding in India is not necessary but necessary, based on the analysis of the situation of the industry and the recent two-year market. The main reasons are as follows:
Although domestic demand still exists, it owes to the "East Wind". Before and after the invitation to tender in India, the domestic market demand has not changed much. Although the demand gap in the downstream is large, the return of gas enterprises is imminent. Compound fertilizer plants and plywood factories are operating at low levels in the near future. The consumption of urea social inventory is slow, the downstream wait-and-see mood is large, and the delivery progress is relatively slow. Or 800,000 tons of tender will be won. This amount is only a week's gross domestic output when domestic gas enterprises do not resume production. In other words, after some gas enterprises resume production, it is only a few days'output. But on January 10, most domestic manufacturers raised urea quotation one after another, and even some large factories in Shanxi started to release more than 100,000 tons due to receiving orders. Does the news of suspension of receipts mean that urea rebound is only due to the sudden start of domestic demand? According to past urea practices, although traders may purchase urea appropriately to ensure the supply of the market in the later period, the time of centralized purchasing should be between 7 and 10 days before, and the price of domestic urea will rise after the labeling. If only considering domestic market factors, without labeling, it should be relatively difficult for urea traders to maintain the quotation?
In summary, although the Indian urea tender has depressed the price of urea in China, the domestic urea tender has also increased the amount of urea receipts. On the contrary, the domestic price has not declined, but has increased appropriately. Under the background of increasingly refined domestic production capacity, the propion of domestic urea exports has gradually decreased. Although the Indian urea tender is not necessary, it also needs to regulate the market.
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