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Ammonia is also boiling downwind with rising urea
Time:2019-03-22   Read:603second  

Recently, the market of urea and liquid ammonia has risen dramatically, and the price of urea and liquid ammonia is also dazzling. In a word, urea is rising smoothly and liquid ammonia is boiling. The reason for the rise in the price of liquid ammonia is that after the end of the "two sessions" of the whole country, the start-up of ammonia enterprises has been rebounded. In addition, some liquid ammonia enterprises have temporary failures and stopped for overhaul or production restriction. The supply of liquid ammonia in the market has been significantly reduced; and what about urea? Originally in the voice of doubt, the slow-rising market jumped into a sustained boost, so far the price of urea is still rising. This wave of unprepared downstream market also leads to a series of problems, downstream high-price urea resistance, terminal market cost considerations, and so on. Does that mean that urea price increase progress may have some resistance?

Firstly, high-price liquid ammonia can guarantee urea and become one of its powerful "backstage". In addition, the prices of liquid ammonia in North China, East China and Central China are still rising, and the price level is high. For example, the reference price of main acceptance and transaction of liquid ammonia in Hebei is about 3140-3350 yuan/ton, and the reference price of liquid ammonia in Hubei is about 3140-3350 yuan/ton. Mainstream acceptance ex-factory quotation also rose from the previous low price of 2500-2600 yuan/ton to around 3000-3030 yuan/ton, and continued to rise in part. If the price of urea falls in the later period, some enterprises will choose to shift the production focus from urea to liquid ammonia, to some extent, to "protect" the status and market of urea. However, the change of urea enterprises'start-up is not only affected by the market of liquid ammonia, but also depends on the intensity of environmental protection inspection and the adjustment of urea enterprises themselves. Since the beginning of this year, the intensity of domestic environmental protection inspection has been expected. Before and after the two sessions, except that the production of some urea Enterprises in Shandong and Shanxi is slightly limited, the production of other enterprises has basically maintained normal level, but is the current southwest market. Due to the environmental protection inspection, the start-up of some phosphate and compound fertilizer enterprises has been reduced.

_Secondly, the demand of industry and agriculture is mainly purchased on demand. Agricultural market let go in spring, but grain prices have rebounded slightly in part, but overall prices are low, farmers'enthusiasm for planting is not high. In addition, the weather of flooding in the South and drought in the North leads to the delay of fertilizer use time and the reduction of fertilizer consumption. Large and medium-sized agricultural distributors maintain prudent on-demand purchasing means, let alone the operation mode of terminal fragmented distributors is more prudent. After the "two sessions" and March 15, the overall industry start-up rate of some compound fertilizer enterprises has risen, the production progress is still acceptable, and the limited reserves of raw material fertilizer in the early stage have accelerated the recent progress of raw material fertilizer, of course, mainly urea enterprises, which is obviously good; but for compound fertilizer enterprises, the old topic is still the slow sales of finished fertilizer, the low enthusiasm of terminal pick-up, and the addition of raw material fertilizer. The substitution of some low-cost fertilizers leads to the constant pressure on the sales of compound fertilizer enterprises. Although there is a cost drag, the price still falls to a certain extent. The consistent conclusion given by industry is to reserve urea on demand.

Thirdly, the expectation of export market. Although the international price can not give confidence to our domestic urea market, according to international news, India may carry out a certain amount of urea bidding in early April or before, and there are many expectations or operations to boost speculation or firm prices in the domestic market.

Finally, in a comprehensive view, the price of urea can boil for a period of time in the short term due to the shutdown or reduction of production of some liquid ammonia enterprises; at the same time, urea is not only indirectly boosted by liquid ammonia, but also under the delicate adjustment of supply and demand, especially in the downstream market due to cost pressures. Considering the considerable profits of urea enterprises, the terminal has concerns about high-price urea and dares not trade. However, the gambling market, to a certain extent, inhibits the rise of urea prices.

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