Is urea rising or falling when VS starts?
Time：2019-01-25 Read：539second
In the recent urea market, apart from the Indian tender, the hot spot is that urea enterprises have a lot of orders to be issued. Before everyone wants to be happy, they encounter the news that most of the Southwest gas urea enterprises will resume production before the end of January. The two collide, and then the price of urea will rise or fall?
_First of all, the situation that urea enterprises are waiting for more orders is that a factory in Inner Mongolia is waiting for 60,000 tons, a factory in Inner Mongolia is waiting for 60,000 tons, a factory in Shanxi is waiting for orders to be issued until the sixth day of January, a factory in Shanxi is waiting for 140,000 tons, then a factory in Hebei is waiting for 30,000 tons of urea, and a factory in Hebei has zero inventory, which is only ten days away from the Spring Festival. Well, does it mean that there will be no pressure on enterprises, or even a stable Spring Festival?
For those urea enterprises that received more orders at the buyout price, the inventory pressure is relatively small and they only wait for the next step to study after the festival. But according to Zhongfei Net Car, most of the statements about so many waiting orders in the market are just legends. There are very few urea enterprises that can reach 50,000-60,000 tons of real waiting orders, and these enterprises. All the urea enterprises which have to make plans for the Spring Festival ahead of time because of the long distance of outward shipment. Most of the urea enterprises whose orders are more than 60,000 tons are received by the Federal Reserve Federal Reserve and provisional advance receipt, some of which are intentional orders and unpaid orders. Recent urea market does not seem to have a particularly good performance, most urea enterprises seem to need to lower a little bit before they can rest assured, especially high-end prices still have room for price reduction.
Secondly, the situation of start-up and promotion is that on December 28, 2018, the Nitrogen Fertilizer Association indicated that some gas-head urea enterprises for spring tillage could resume production at the end of January, and then it was a warm winter in winter of 2018. Natural gas did not appear the anticipated gap. Then, on January 23, Yunnan gas-head urea plant resumed production. On December 24, a large Sichuan plant tested and estimated that it would produce products on the 28th. At the end of January, two other Sichuan and one Chongqing factories will resume production, and then resume natural gas supply to the two Ordos urea factories after February 15. After careful calculation, domestic urea production will increase from 120,000 tons at present to more than 130,000 tons around January 1. By the end of February, daily production may rise substantially to 145,000 tons.
_Considering that the inventory of some gas-head urea enterprises which have stopped production since the beginning of December has not been exhausted, besides the basic consumption of raw material urea taken by compound fertilizer enterprises, there are not many plywood and power plants receiving goods, and the urea goods taken by distributors at all levels have neither done much export nor sold to farmers. Think carefully, for the time being, the price of urea returned for the Spring Festival is not happy or worried. Fixed.
Finally, in the winter of 2018, the distributor did not take too much urea or compound fertilizer. The light reserves of compound fertilizer in many places may be only 50%, which is much lower than the same period in previous years. Moreover, the market share of extruded granular ammonium chloride, ammonium sulfate, formula fertilizer and organic fertilizer continues to increase. In the past three years, the profit of crop planting is slight or even loss, even though the price of corn in 2019 is expected to be better. However, farmers should not invest too much in land. The first half is about the possible shortage of urea and compound fertilizers in the spring of 2019. The price of urea is expected to rise. The second part is about that as long as farmers reduce their input, urea prices will not rise for too long.
In short, most urea enterprises are in good condition before the festival, and the space for price reduction should not be large, but a few enterprises have not prepared in advance, and then they should reduce the price and absorb the bill.
_Generally speaking, the current urea enterprises are mostly good for orders to be issued, but the oversupply of urea needs to be carefully studied after that. The gas-head urea enterprises are about to resume production, and the logistics tension will not last too long before and after the Spring Festival. Probably, with the return of winter wheat to green fertilization after the festival, the start of compound fertilizer enterprises, and the occasional environmental warning of local urea enterprises to limit production, at that time. The products of gas-head urea enterprises haven't produced too much pressure yet. The price of urea will rise in a short period of time. The amount of urea laid by urea enterprises in front and in the next few years is enough to meet the demand of spring market. The price of urea will continue to rise slightly and fall sharply (coal price may fall again and again). In short, the industry is generally not optimistic about the spring market, the economic environment is depressed, reverse operation seems not to be desirable, should be less purchase and fast sales.
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