This year's urea market has never escaped the frequent pace of price adjustments, with roller coaster like ups and downs. For example, in the past 10 days or so, the urea market has staged another "farce" of ups and downs, with some markets experiencing fluctuations of 100 yuan within a day. Supported by seasonal demand, prices fluctuate periodically, but from a general perspective, the pessimistic expectations of the industry for urea have not changed, The urea market has sufficient or even excess supply, weak domestic demand, and poor exports. For example, in the recent Indian bidding, the lowest bid price obtained was 284.9 US dollars per ton CIF port on the east coast and 279.7 US dollars per ton CIF port on the west coast. This has had a certain negative impact on the domestic market, leading to a strong atmosphere of urea price reduction in recent days.

Up to now, the domestic urea price has decreased significantly and rapidly. The urea market has always maintained an unexpected price adjustment style, such as the prices in the main production areas of Lianghe and Shandong once again fluctuating at around 2000 yuan/ton. Downstream demand has weakened, and upstream costs have also decreased, making the urea market vulnerable. The mainstream factory quotation for urea in Shandong region is around 2070-2150 yuan/ton, while the receiving price for urea by composite fertilizer enterprises in Linyi region has decreased from 2300 yuan/ton in the same period last week to 2070 yuan/ton. Even though some urea enterprises in Northeast China have entered the maintenance period, the decrease is the largest. The mainstream factory quotation is between 2230-2248 yuan/ton, with a maximum daily decrease of 360 yuan/ton; Traders hold bearish expectations for the trend of urea and operate back-to-back, which inevitably leads to a sluggish market in the future.

Firstly, from the perspective of supply, the production load of urea enterprises is at a high level. Except for some enterprises such as a large urea plant in Northeast China entering the annual maintenance period, other enterprises have no plans for centralized maintenance in the short term. On the contrary, some enterprises have completed maintenance. According to statistics from China Fertilizer Network, the total daily production of urea is about 171000 tons, and there is no trend of reduction in supply in the short term; In addition, the price of liquid ammonia has been continuously decreasing in recent days, with a significant decrease in some areas. Due to the impact of domestic oversupply, weak demand, and multiple negative effects of imported ammonia, the cost pressure on liquid ammonia enterprises has increased. The price drop near the cost line has forced some enterprises to tilt their production focus slightly towards urea; In addition, as coal prices are decreasing, the cost of urea enterprises has also decreased, and the production enthusiasm of enterprises is relatively high.

Secondly, as demand has weakened, the negative impact of the high start of urea production has become increasingly apparent and "fatal". Firstly, the demand for agriculture has weakened, and the demand for top dressing has gradually come to an end. The grassroots market only supplements the final orders sporadically, and dealers have no reserve demand or plans, resulting in a continuous loosening of market sales prices; The long-term bearish expectations of large and medium-sized traders for urea remain unchanged, maintaining a back-to-back operation with low inventory; Secondly, there is weak demand in the industrial sector. With the end of summer fertilizers, the production and operation of high nitrogen fertilizers have decreased, and the demand for urea by composite fertilizer enterprises has decreased. In addition, the low price of ammonium chloride has weakened the sales of composite fertilizers, and the price has also decreased. Some enterprises have purchased ammonium chloride to replace some urea, which has a negative impact on urea; After the release of the label, based on its low price, it is beneficial for the domestic urea market.