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As of the first week of June, formal Urea Export was finally welcomed: a manufacturer in Inner Mongolia deposited about 80,000 tons of large granular urea at Qinhuangdao Port, leaving the factory at 1,710 yuan/ton, which accounted for about 279 dollars/ton offshore without considering the profit of intermediaries; it was heard that 50,000 tons of urea had been really traded, and the export offshore was about 281 dollars/ton.
In the last five days of May, the prices of urea manufacturers in Shandong, Lianghe, Shanxi, Jiangsu and Anhui increased by 10-30 yuan/ton. The prices of urea manufacturers in Northeast, Southwest and Inner Mongolia still fell back. In the first week of June, the prices of some urea manufacturers in these areas basically fell back to their original point, and the prices in Southwest China tended to be stable. Most urea manufacturers in Northeast Inner Mongolia lagged behind and rose slightly.
_Following the continuous rise of international urea prices for nearly one and a half months and the drop of China's off-shore guiding urea prices for one and a half months (as shown below), China's urea prices are finally in line with international standards. Is there a big export advantage? Can the price of domestic urea rise again next?
On the one hand, the temporary urea export situation is better, but the export still needs to wait for news of India's new tender. Up to now, the low-end CIF price of India has risen to US$293/ton. Considering the freight cost from urea to India of about US$13/ton, without considering the profit of intermediaries, China's urea export situation is not bad at present. The export volume will not stop at 80,000 tons, especially the low stock of urea ports in China. Once the supply situation in Southeast Asia or India is better, it will help a lot. Digestion of urea production in China, especially for large granular urea entering the off-season demand
However, it is worth mentioning that whenever India invites tenders, the competition between international suppliers will be fierce, and international prices will mostly cool down. The price of 1710 yuan per ton of large granular urea from the factory in China will probably not be maintained. When small granular urea enters the off-season, the overall domestic urea price level will be at a very low level. Considering only the last peak season of summer fertilization, although exports will support domestic prices, it still depends on the real volume of transactions and needs to be observed.
On the other hand, domestic urea prices turned weak again in early June after rising at the end of May. The main reason is that the gap of top dressing in Northeast and Northwest China is not very big. The time for urea to be used as base fertilizer for summer maize is not yet up. The production of summer fertilizer in compound fertilizer enterprises is coming to an end, and the manufacturers have no bottom in their hearts.
Firstly, there is a certain amount of surplus in the spring in Northeast China. Only the urea price in Inner Mongolia of Liaoning Province lags behind and rises slightly. Farmers begin to use urea after June 15-20. Before that, the time for replenishing stores for fertilizer in Inner Mongolia of Northeast China is not much. Urea manufacturers are expected to mainly ship, urea prices are difficult to rise sharply. The price of urea in Northwest China is relatively strong, mainly because the market in Xinjiang is abnormal, but outside. The price is also very low, to some extent, it will inhibit the rise of the price of land sales, after all, it is the last time to use fertilizer this year, shipment should be the first; wheat harvest is under way in Shandong, Jiangsu and Anhui provinces, and there has been rainfall recently. It seems that there is no rain after the end of wheat harvest, which is not conducive to the sowing of summer maize. It is preliminary to see that summer maize will be sown around June 15, with a small amount of base fertilizer. The price of urea should rise steadily or slightly until the end of June, when urea can be used as fertilizer for summer maize. At that time, the price may rise considerably. For the time being, the price increase should not be long.
Secondly, the production of high-nitrogen fertilizer in compound fertilizer enterprises is coming to an end, and the quantity of urea is gradually decreasing. The price of urea in Linyi has dropped from 1980-1990 yuan/ton to about 1950 yuan/ton. When summer maize is sown and topdressed, the competition between high-nitrogen fertilizer and urea is still unknown. Whether high-nitrogen fertilizer and urea can rise together or not depends mainly on the progress of social stock and fertilizer use. Power plant consumption is large, plywood plant delivery is general, the next price increase mainly depends on the compound fertilizer enterprises to hold up and the increase of power plant delivery.
Again, the supply side is not too terrible, but relative to the previous expectations, in fact, as of the first week of June, the recovery has been restored. The daily production of urea has reached 162,000 tons. Most urea enterprises'overhaul time is after the end of June. A factory in Inner Mongolia and a factory in Ningxia may resume production next week, and the daily production of urea may reach a new high. Although the price of liquid ammonia has risen sharply since the end of May, it is still uncertain whether it can continue. Urea manufacturers need to cope well.
_However, people in our industry can not be too pessimistic, the urea market in the second half of June can be expected, of course, the price is in the Dragon Boat Festival back and forth lagging behind the level of a certain degree of rise.
Summer is the last season for digestion of urea, high nitrogen fertilizer, nitrogen and potassium, extrusion of granular ammonium sulfate and ammonium chloride fertilizers. Our manufacturer's mentality is still somewhat delicate. We should not blindly bullish all the way, nor blindly bullish until later sales. We should grasp the degree of availability and delivery, cooperate with urea manufacturers and large agricultural companies, and urea market in summer. Place can rise mainly.
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