One week review: urea market weakened slightly this week. In terms of supply, with the inspection and repair production and the completion of Inner Mongolia port transfer to domestic sales, the market supply source increased significantly. In the aspect of demand, the operating rate of compound fertilizer increased slightly, and the agricultural sector ended. The flood disaster in the South had a certain impact on the demand and shipment. The lowest price on the east coast is US $240.5/t CFR and the lowest price on the west coast is US $242.5/t CFR. Although the price is lower than expected, due to the low inventory level of domestic factories and the start of compound fertilizer production in autumn, there is no need to be too pessimistic in the short term.
Start up: new projects are put into operation and Nissan continues to improve

According to the survey conducted by the nitrogen fertilizer industry association on July 14, 2020, the daily output of urea in China is about 153200 tons, and the operating rate is about 71.54%. The operating rate of urea enterprises using coal as raw materials is 71.05%, and that of urea enterprises using natural gas and coke oven gas as raw materials is 72.81%. Compared with last week, the operating rate of urea enterprises in China increased by 2.65 percentage points and 2.25 percentage points on a year-on-year basis. The operating rate of coal enterprises increased by 1.83 percentage points compared with last week and increased by 2.59 percentage points year-on-year. The operating rate of gas enterprises decreased by 0.97 percentage points compared with last week and increased by 1.38 percentage points on the same period.
International: strong demand from India supports international strength

India's mmtc bid closed on July 17 to buy 1 million tons. With limited supplies in the Black Sea and the Middle East, India has to rely on China to provide enough urea they need. China's offer has risen to US $235 / T FOB, indicating that the price of the printed mark should be close to US $250 / T CFR in order to be in line. This has also led to a rise in prices in Brazil, where all suppliers have quoted more than US $250 / T CFR, and has also prompted traders to go long. For example, all the available sources in Indonesia in August have been scheduled.
This week: the price is strong in the north and weak in the south

This week, the mainstream transaction price of factories in North China and East China dropped by 10-20 yuan / ton, and the price in the southern market was mainly stable. The main reasons are as follows: with the resumption of the production of China coal, the commissioning of the new open water project, the completion of Inner Mongolia port freight forwarding, the domestic urea supply increased significantly, the agricultural demand in North China gradually weakened, the flood disaster caused great economic losses to many southern provinces, and agricultural planting was also affected, but most of the regions have passed the fertilization season, which has little impact on the overall fertilizer use. In autumn, the preparation of compound fertilizer production was started, but the willingness to purchase urea was weaker than that of phosphate fertilizer and potassium fertilizer. The replenishment of large factories with order production plan was the main way, and the demand of rubber plate factory was stable. This week, the market is still focusing on the printing of the label. At present, some traders have gathered in Hong Kong in a small amount, and the price is similar to the previous level. However, due to the appreciation of RMB, the ex factory price has been affected.

Next week: the price of printing label is lower than expected, but there is no need to be overly pessimistic
On the evening of July 17, India's mmtc announced the latest round of printing price, with the lowest price of USD 240.5/t CFR on the east coast and USD 242.5/t CFR on the west coast. Considering the freight and other costs of 14-15 US dollars / ton, equivalent to about 225-226 US dollars / ton of domestic FOB, which is more inversely linked with the current domestic price, it is estimated that the participation of Chinese sources of goods is not high. Although the price is lower than expected, due to the low inventory level of domestic factories and the start of compound fertilizer production in autumn, there is no need to be too pessimistic in the short term.