After experiencing a sharp decline in coal price, the overall price of urea showed some signs of decline after entering November. Although it rebounded occasionally, the transaction performance of new orders was poor, most of them were waiting in the downstream, the price of urea was relatively weak, and the urea prices in various places continued to fall. According to the monitoring of China chemical fertilizer network, For example, the mainstream urea ex factory quotation in Shandong fell back to 2480-2540 yuan (ton price, the same below). Although the quotation in some regions is relatively high, the trading volume of high-end quotation is relatively small. 2021 has entered the middle and early ten days of November, and the winter reserve fertilizer is also gradually starting. The actual demand of the market still exists, and the supply of goods in the early stage is relatively small, and the market demand gap is still large. On the other hand, the overall supply or inventory reduction may be possible. According to the current statistics, the daily physical output of urea in China is maintained at a slightly higher level of 130000 tons, lower than the level of more than 150000 tons in the same period of last year, On the surface, the recent start-up of urea may show some signs of decline, and the potential demand is large, but the price does not rise but falls. The main reasons are as follows:

First, the cost support is relatively low. The main reason for the sharp decline in the price is the strong intervention in the coal price. According to the market feedback, the cost of low-end coal enterprises has fallen below 2000 yuan. Although the supply of urea is still limited in the later stage of this year, the price of natural gas has not increased too much. The cost of urea in some Sichuan is lower than that of low-end coal enterprises, Urea cost support is relatively poor. Assuming that the coal price is still the high-end level in the early stage, even if there is still resistance in the downstream market, the factory will enter the possibility of large-scale shutdown under pressure, and the downstream market will be forced to accept the high price. At this stage, the downstream wait-and-see mentality is strong, the cost support is weak, and the price support is relatively weak.

Secondly, the surface reduction of supply, the actual gap between last year and this year is not large. Although the daily physical output of urea in the same period last year remained at the level of 150000 tons, the difference between last year and this year is whether the export is open or not. At this stage, the export is hopeless. Although it is rumored that some urea that has been declared but has not been collected in Hong Kong may be exported in the near future, it does not mean that the export will be liberalized. It is expected that there is little possibility of domestic urea export in the short term, At present, the domestic supply of urea is not too small.

Finally, demand remains, but demand is not urgent in the short term. According to the feedback from the Northeast market, at present, the urea reserves of local compound fertilizer enterprises are mostly 20% or less, and the overall potential demand in the later stage is relatively large. However, at present, the market is in the early stage of fertilizer preparation. Although there is money for goods, they basically maintain a certain degree of caution. According to the feedback from the market, at present, the operating rate of compound hypertrophy plant is less than 30%, most of the downstream onlookers, and the market demand exists, However, the start-up is relatively slow, the transaction of new orders is not supported, and the price is difficult to improve significantly.

To sum up, the overall start-up of urea fluctuated in a narrow range recently, the gas head enterprises delayed the shutdown, the units of some coal head enterprises recovered, and the potential demand in the downstream market still exists. However, due to the low cost support and the poor transaction of new orders, the price of urea is still likely to continue to decline. However, due to the excessive demand, urea may also rebound, some traders said, In order to avoid the embarrassment of failing to catch the goods in the later stage, the waiting time with money should not be too long.