At the end of August, urea ex-factory prices rose again tentatively. That is to say, following the second "suspected bottom" on August 24 (for example, the price of Shandong ex-factory dropped to 1700-1720 yuan/ton), the main urea ex-factory quotations in Shandong have risen by 10-20 yuan/ton to 1740-1780 yuan/ton, and the two rivers, Jiangsu and Anhui have also risen slightly by 10-20 yuan/ton.

Should the price of urea be increased this time? Is there enough reason for this price increase? Should we take the goods?

A: The reason for the price increase is not enough. We should not believe that if we just need customers, we can get less. If we don't need customers, we can wait until the price "reaches the bottom" in mid-September.

Firstly, the start-up rate of compound fertilizer enterprises is increasing, the quantity of urea is temporarily a little larger, and the start-up rate will decrease soon, and the support for urea price will weaken. According to statistics from Zhongfei. com, the start-up rate of compound fertilizer enterprises reached 50% by the end of August, which is the peak in the past month. A small increase in urea prices makes sense. However, considering the delivery cycle of more than half a month, distributors of about a week shop to farmers, together with the requirements of military parade blue and environmental protection, resumed in mid-September. The start-up rate of Hefei enterprises will be significantly lower, and the price of urea should be reduced by then. The economic environment is poor, the trade war is not going to stop, industrial power plants and plywood factories have been plain for urea delivery, and there will be no obvious pull next.

Secondly, some urea has been used for direct fertilization in agriculture, and the next gap is very small. More winter wheat will be sown after the 11th anniversary. The demand for urea for base fertilizer is very small, and the time for topdressing is still early. Autumn is the world of high phosphorus fertilizer and high potassium fertilizer. With the substitution of ammonium chloride, ammonium sulfate and formula fertilizer for urea, especially in recent years, the income of grain and cash crops has been poor. The crops in many fields have been changed into two seasons, and the crops in two seasons have been changed into one season. The demand for urea in direct fertilization has become less and less, which can not bring about a pull on the price of urea. Basically, we only need to pay attention to the impact of the production of compound fertilizer enterprises on urea prices.

Thirdly, the export quantity is only slightly expected, and the pull of export price should be small. Although Ethiopia issued bids for 600,000 tons of urea in the last week of August, Bangladesh issued bids for 200,000 tons of granular urea and large urea, and India's previous bids ended on 23 and there were many rumors that new bids might be issued, Ethiopia imported less than 1,000 tons of urea from China last year. Bangladesh only takes more than 200,000 tons of goods from China, and Bangladesh has taken more than 200,000 tons from China in January-July 2019. The real impact of these two tenders on China's urea market is only in price, but only in quantity. In terms of price, the FOB price of urea in Egypt is suspected to hit the bottom on the basis of 250 US dollars/ton. This week, it rose to 250-267 US dollars/ton. Instead, the FOB price of urea in China has been lowered. At present, it is only 253-263 US dollars/ton. According to the exchange rate of 7.15, the price of urea sent to Yantai and other major ports in China is 1700-1760 RMB/ton, roughly speaking. Look, at present, the price of 1 700 yuan/ton of Shandong export factory is expected to be maintained. Whether urea price can be promoted by export still needs to pay attention to whether the current off-shore price of urea can be maintained, especially the real amount of urea transaction in the bidding of India and other places.

Finally, daily urea production dropped to about 147,000 tons in late August and is expected to rise to 160,000 tons in mid-September. Recent maintenance enterprises still have stocks to sell, low-cost supplies in Xinjiang, Inner Mongolia, will arrive in many places within a week, urea prices are difficult to continue to rise. Especially if the urea price falls below the cost line and falls to the pain point of urea enterprises, and if the natural gas supply and coal supply decrease in winter, the urea start-up rate will not be reduced to the extent of pulling the price up.

_ One is the restriction of military parade blue and environmental protection on the start-up of urea enterprises in Shandong and Shanxi Province. The other is that India may issue a new tender for export in mid-September.

As the parade approaches the 11th anniversary, environmental protection inspectors will be more stringent. Of course, if the air quality meets the standards, the restrictions on the start-up of urea enterprises in Shandong and Shanxi will be very small. Even if there are some restrictions, it is likely that the official documents will not be issued after the end of September. In mid-September, a large number of enterprises that have been repaired will resume production, such as a factory in Shaanxi Province in early September, two factories in Inner Mongolia around 10 September, a factory in Xinjiang in mid-September, and the urea start-up rate in a certain period of September will be very high. Gao.

In terms of export, India may issue a tender in mid-September. The number of urea bids won by China is particularly critical. The price will not be too high initially. After all, India really does not lack urea after winning the last bid of 1.69 million tons. If the tender price is low, it will win more tenders. If the price is high, China will win more tenders. India can issue new tenders after a small number of successful bids. What's more, it's only speculated about the time of printing. If there is no tender in September, the amount of urea exported to other destinations in China should be small, which makes it difficult to drive the price of urea to rise in China.

In short, the short-term rise in urea prices is not credible. In September, supply will increase, domestic demand will decrease, the real increase in exports needs to be observed, and the price probability will decrease. For our distributors, it is indifferent to take goods just in the near future, and it is not suitable for long-term reserves.