Wolf Really Comes --- Pre-Festival Urea Start Up
Time：2019-01-30 Read：649second
In recent days, urea prices have risen slightly. Most of the large factories'orders have been placed after the Spring Festival. Because of the less pressure on sales, there is no need to conclude business at present. The overall price has risen appropriately since last week. At present, the mainstream urea ex-factory quotation in Shandong Province is 1900 yuan (ton price, the same below). The urea receiving price in Linyi area has also risen to 1910-1920 yuan, 1880-1900 yuan in Hebei area and 1860-1 yuan in Henan Province. 900 yuan, about 1800 yuan in Shanxi, but yesterday the market came to the news that some urea gas enterprises in Southwest China have resumed production. Previous market rumors said that urea production was repeatedly delayed when the shutdown was repeated. Some industry jokingly called it "Wolf Comes". As early as early as January this year, the market once again rumored that gas enterprises would resume production before the Spring Festival, affected by "Wolf Comes". The industry also holds a wait-and-see attitude, but at present the leading enterprises formally resume production. Some industries say that the newly rising urea price may be affected to a certain extent. The author and some industries know that the possibility of further decline in the near future is low, mainly in the following aspects:
First, the supply is relatively small. It is learned from the market that only the leading urea enterprises in Yunnan and Sichuan have resumed production at present. Due to the regional particularity, their impact on the outside world is relatively low. In addition, the enterprises have just resumed production. If they want to achieve stable production, it will still take some time, while the surrounding demand still exists. Some industries believe that the overall impact on the urea market in the short term is not too high.
Secondly, the cost is relatively high. It is rumored in the workshop that the gas head enterprises are mostly using the gas beyond the premium. From the cost point of view, the cost of gas head enterprises is higher than that of coal head enterprises, and the cost may increase again. Gas head enterprises do not occupy an advantage in cost. If they want to grab orders before the Spring Festival, the loss area of enterprises may be larger. In addition, due to the heavy wait-and-see mentality in the downstream market in the early stage, the potential demand in the later stage will be greater. Quantity is still acceptable, and it is expected that there is no need for leading enterprises to compete in the current market.
Finally, some orders have been locked. Since the announcement of the bidding results in India, coal head enterprises have lowered their prices and absorbed orders. At present, some large factories hold orders that can last until the Spring Festival. Some enterprises say that even if the current transaction can only be found after the festival, instead of competing with the market for orders at present, they might as well bid to support agency sales.
In summary, although compared with last year, the gas-head urea enterprises resumed production ahead of schedule, but the pressure of urea enterprises'sales is not too great at present. In addition, they are about to enter the holiday mode, the market transaction will be weakened, the overall price of urea will fluctuate slightly in the short term, but the rest of the gas-head Enterprises in the market will resume production soon after the holiday. At that time, the supply pressure will increase, and the later period should be closely watched. Construction of downstream industrial markets and procurement of agricultural markets.
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