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The fluctuation of urea may have an effect but not much.
Time:2019-06-05   Read:683second  

In June, wheat harvesting activities began and the summer fertilizer market began to sweep away. This summer's compound fertilizer market has not brought too many surprises. Compared with previous years, not only the market is lagging behind, but also the overall atmosphere is not warm. It is understood that, while the upstream enterprises are facing cost and competitive pressure, the sales volume of most distributors has decreased to varying degrees, and profits have also declined.

Indeed, the raw material market has a greater impact on the market of manufactured fertilizer, especially urea. Since April, frequent fluctuations in urea prices have weakened the psychology of downstream stockpiling and restrained the release of high nitrogen fertilizer demand. At the same time, the uncertain future market of urea has been weaker than the market of manufactured fertilizer from beginning to end. Although the market of high nitrogen fertilizer is coming to an end, it also affects other manufactured fertilizers, such as water-soluble fertilizer. It's a test.

First, the price is unstable. Water-soluble fertilizer price level is higher, the price difference between high and low end is larger, so-called brand product price level is not equal, the change of cost or can not cause water-soluble fertilizer price to fluctuate sharply, but inevitably some enterprises may make adjustments, the first reason is to strive to be consistent with the mainstream, stabilize the old customers, once deviating from the mainstream price or market price, the original cooperative customers are easy to accept others. Brand products; the second reason is that while consolidating old customers, developing new customers is also the top priority. Only when the product quality and price meet downstream psychological expectations, can we have the opportunity to further occupy the market share.

Secondly, demand is unpredictable. Since the development of water-soluble fertilizer market, in addition to the gradual improvement of each link, the demand of each season has increased accordingly. Take the northern region as an example, not only in the traditional winter peak season, but also in the spring and summer season, the amount of fruit and vegetable planting has gradually increased. Recent fluctuations in raw material prices and subsequent uncertainties will more or less affect the sales of water-soluble fertilizers. The first reason is that the downstream fertilizer use time is not very urgent and the preparation of fertilizers is cautious. The second reason is that the autumn crop planting area is not larger than the previous seasons, the overall fertilizer consumption is not much, and the demand for water-soluble fertilizers may be reduced.

Finally, supply is difficult to measure. After the end of the summer market, the autumn market begins immediately. The fertilizer supply in the upstream is very important. Since the normalization of environmental protection, regional and periodic inspections have appeared frequently. The normal production of enterprises is often limited, and even the situation of partial supply shortage occurs occasionally. In addition, since the normalization of environmental protection inspections, safety inspections have gradually increased, and enterprises should not only do so. To qualify for environmental protection, we must pass the customs safely. For small and medium-sized enterprises, the pressure is great. Therefore, once there is a problem in supply during the continuous release of demand, the situation may be more embarrassing.

To sum up, the fluctuation of raw material urea market does have a certain impact on the trend of finished fertilizer market, but as far as water-soluble fertilizer is concerned, its seasonal demand and supply situation may be more important, and it is expected that the autumn market will continue to be stable.

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