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Urea Price Reduction Suffers Fertilizer in Summer?
Time:2019-04-10   Read:1009second  

In mid-April, fertile cities around the country had a strong atmosphere in the spring. With the gradual start of the terminal market, the overall trading situation was still acceptable, especially in the northern region. Although the early partial market progress lagged slightly, it has also improved in recent days. The spring market has not yet finished, and the summer market has started. So far, some enterprises have introduced the temporary price and policy of summer fertilizer, and collect money for some customers.

It is gratifying that the market situation of high nitrogen corn fertilizer is relatively ideal, and the price is at a higher level in the same period of previous years. In addition to demand pull, the support of raw material market is indispensable, but recently local urea prices began to fall. Influenced by supply increment, imported urea arrival and high prices in the downstream, domestic urea prices may continue to decline slightly in the short term. In this way, there is a lot of suspense about the future market of fertilizer in summer. The author believes that, despite the impact of raw materials, since the summer fertilizer market has been opened with a high profile, it may remain stable for some time.

Firstly, enterprises have begun to harvest fertilizer in summer. As mentioned above, part of the summer fertilizer market has started. Some enterprises aim at the opportunity of urea soaring. They have issued quotations and policies to collect money. In order to avoid the price of high nitrogen fertilizer rising further with the urea market, some distributors have to pay a proper amount of money to stock up. Once the price of urea falls, the market pessimism will increase, so the price of high nitrogen fertilizer also has the risk of falling, but considering that some customers have been pre-harvested at relatively high prices in the earlier period, enterprises will not easily cut fertilizer prices substantially, in order to cater to the subsequent fertilizer preparation psychology downstream, preferential policies may be narrowed or cancelled.

Secondly, there is a large surplus space for fertilizer demand in summer. Generally speaking, the northern field crops are planted in a wide range of areas, and the fertilizer market is relatively more active in spring. However, during the summer, most of the areas are planted with maize and rice, and the demand for fertilizer can be imagined. At present, only part of the corn fertilizer market has a slight trend, and the downstream caution still exists, mainly due to the unknown future market of raw materials and the long-term use of fertilizer. With the clarity of the market and the promotion of time, the terminal demand will be released. Therefore, in the case of weakening raw material prices, the overall market may advance slowly in the short term, but in the long run, it is still possible.

Finally, local environmental safety monitoring pressure will persist. A series of topics, such as environmental protection and safety, must have been well known to everyone. The original situation has been more severe. Unexpectedly, the serious accident of explosion of Yancheng Chemical Plant in Jiangsu Province has been aggravated again recently, and unprecedented production safety inspection has been carried out in some areas. Although the normal production of most fertilizer enterprises is not a big obstacle, it inevitably results in partial phased shutdown and production restriction. Spring and summer markets almost uninterrupted convergence, waiting for release of demand or will lead to a partial time of tight situation, then the summer fertilizer market heat will rise.

Generally speaking, although the anticipated decline in urea price will inevitably affect the compound fertilizer market in spring and summer, or delay the progress or fall the price, based on the current situation and the forecast of the development at both ends of supply and demand, the fertilizer market will remain stable in summer.

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