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Urea: Gambling Spring Market Manufacturers are a little scared
Time:2019-02-22   Read:572second  

The highly anticipated 15th of January has quietly passed, so the focus of the fertilizer market is also on the grass-roots agricultural demand and the start-up progress of compound fertilizer enterprises, which is related to whether the domestic urea market can turn a corner. But up to now, the domestic urea market is still weak, urea production enterprises are facing a delicate predicament of not much to be issued, Limited new orders, insufficient rebound power; the grass-roots and wholesale markets are still full of wait-and-see sentiment, slow start-up, even part of the market has not been started; industrial compound fertilizer, plywood and other enterprises are slow to resume production, and the enthusiasm of raw material procurement is not high. Distributors are not confident in the current urea market, and some of the high-priced supplies reserved some years ago are still waiting for sale. Before the spring Market war, whether the weak urea market has the chance to turn over is still the top concern of the industry. As for the gambling spring market, the manufacturers are still a little scared.

Firstly, the supply of urea is too large, and the chance of rebound is not very good. The domestic urea market has been declining since the resumption of production of gas-head urea enterprises in Southwest China. In addition, some gas-head urea enterprises in Inner Mongolia are ready to start construction one after another. At that time, the supply of urea in the market will continue to increase. According to the statistics of China Chemical Fertilizer Network, the overall industry start-up rate of urea enterprises is 57.95%. In addition, the interest rate of urea price adjustment should be taken into account. The closely related market trend of liquid ammonia is now generally falling in domestic price of liquid ammonia. Some factories have shifted their production focus from liquid ammonia to urea, which has virtually increased the pressure of urea enterprises'shipment. In the short term, from the perspective of supply and demand, the price of liquid ammonia has no obvious or significant rebound opportunities, but there is still room for a fall, which can not provide opportunities for urea prices to improve. The focus of production is temporarily difficult to adjust.

Secondly, demand starts slowly and the rebound is insufficient. On the one hand, the grass-roots agricultural market started slowly, just after the 15th day of the first lunar month, the terminal just had to ask for a single price, but the actual transaction was small, coupled with the low price of agricultural products, some farmers or traders still accumulated in the warehouse of grain for sale, farmers'enthusiasm for planting is not high, the planting structure may face adjustment, fertilizer habits may also change, or fertilizer use time may be delayed when hesitation occurs. Even miss the time of centralized purchasing. In order to avoid risks, some large agricultural distributors follow in and out, or purchase in proper quantities, arrive in batches or operate the Federal Reserve many times. Some small and medium-sized distributors still have high-price urea in their hands, which leads to unsatisfactory replenishment quantity and progress. On the other hand, industrial compound fertilizer enterprises started to rebound slightly, but the overall progress is slow, and their own high inventory, affecting the re-purchase of raw materials; finally, the good news of bidding has not yet come from the international market, domestic urea and port urea supply can only be digested in the domestic or stagnated in the port waiting for the opportunity to ship, the pressure of the domestic market is difficult to ease.

Finally, on the eve of the spring Market start-up, the inquiry forms of terminal grass-roots units and industry will increase one after another, or agricultural distributors will replenish their warehouses appropriately. The urea market as a whole is awaiting the start of the spring market. The market will recover to a certain extent. The manufacturers are afraid that the market is still available under the gambling market. However, considering the contradiction between supply and demand in urea market, slow start of terminal and other factors, it is expected that the urea market will still be difficult to get rid of the weak situation in the short term at least until the end of February. It is expected that there will be room for compromise in local prices to stimulate downstream pickup.

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