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Urea began to fall after a small rise. Why?
Time:2019-07-16   Read:850second  

As we all know, the most abnormal thing in the urea market is that the final bidding of urea is more than 1.69 million tons. However, the total amount of urea in China has been reduced from 500,000 tons, 850,000 tons to 1,000,000 tons at first, and then to 600,000 tons only because of the shortage of logistics and the reluctance of domestic manufacturers to supply at a low price. Up to now, China has won the specific bidding of urea. The number is still unclear.

_This printing has brought support to the Chinese urea market in July. On July 8-12, the quotation of urea manufacturers in Shandong, Lianghe, Shanxi and other places increased by 20-40 yuan/ton, while the quotation of urea manufacturers in Sichuan and Chongqing increased by 20-40 yuan/ton after the fall. Of course, a few of these manufacturers have begun to decline. Looking at the end of summer demand in Jiangsu, Hubei and other places, they are tired. It is estimated that 20-40 yuan per ton will be reduced and 70-100 yuan per ton will be lost in the northeast.

_Small increase in urea is easy to explain: First, although the price of winning the bid is low, considering that the urea port stock in China has been at a low level of about 200,000 tons in recent days, as long as the successful customers do not break the contract, the possibility of getting more than 600,000 tons of goods in China is great, compared with in July 2017 or 2018. Urea prices have fallen sharply. In July of this year, urea enterprises are basically free of stock pressure and can digest a large part of output through export. Secondly, the demand for summer maize fertilizer is slightly delayed compared with previous years. It is also reasonable for urea prices to rise slightly in Shandong Lianghe and other places, although urea manufacturers first collect low prices and then go up. Price adjustment, but high prices also have a certain deal, not entirely speculation; Again, in early July, we heated discussion urea industry began to speculate about the spring of the overhaul of enterprises due to high prices and some enterprises will delay the overhaul time to autumn, is not an empty breeze, urea daily production from the previous period of 161,000 tons of high to 151,000 tons, so The supply of urea is not as much as we imagined, and it can also support the price of urea slightly. The only thing to worry about is that most enterprises will resume production in late July. Finally, the most crucial thing is that this year is the 70th anniversary of the founding of our country. The more the pressure of environmental protection is, the more urea will start or be affected in September, so industrial compound fertilizer enterprises will start production in July. Industries, power plants and plywood factories have begun to reserve properly, which has also supported the price of urea slightly.

On July 13-15, in just three days, the quotation of urea producers in Henan, Henan, Jiangsu and Anhui provinces in Shandong Province was reduced by 20-40 yuan/ton. The receiving price of urea in Linyi fell to about 1940 yuan/ton from 1970 yuan/ton at the high end of the previous week; the northwest of Northeast China was temporarily stable; the price of urea in Sichuan and Chongqing rose slightly by 20-40 yuan/ton or wanted to rise, and more sentiment welcomed the move. Feiwang Membership Zone.

_Is this the rhythm to start a full-scale decline? That's roughly the case. Firstly, the price increase is also the last effort of the label printing. It is also a small increase in urea manufacturers'low-price pending orders. It has not spread too far, nor can it last too long. Secondly, there is only one tail left in summer fertilizer demand. In theory, autumn fertilizer is the peak production season until early August or even after mid-August. It does not support urea very much. In another week or two, low-cost urea in Xinjiang, Inner Mongolia, will reach many markets. Thirdly, the supply rate is still high. Some enterprises are going to overhaul or overhaul, and others are going to resume production. The daily production of urea will still run at 150,000 tons or even over 155,000 tons. Fourthly, whether it is to advance the production of autumn fertilizer or to bring pressure to urea production by environmental protection, as long as the price of urea has not fallen much, all demanders can only take appropriate goods, these unexpected temporary factors will not play a big role.

In short, in the first half of July, urea has basically overdrawn all kinds of benefits, and then the price of urea will probably fall, or a larger rate, then we will observe, back to 10,000 steps, if not fall, the price of August-September will not be able to smoothly by the concentrated demand for autumn fertilizers and obviously rise, our urea manufacturers will not. It is the best policy to operate properly.

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