In early December, urea prices mainly fluctuated strongly, and the frequency of manufacturer price adjustments was very low. In mid December, urea prices fluctuated weakly. By late December, some urea manufacturers slowly declined, while a few manufacturers significantly decreased. For example, as of December 22nd, some local manufacturers in the northwest had accumulated a drop of about 120 yuan/ton in their factory prices, while on the 23rd, some manufacturers in Shandong had only produced 2300-2310 yuan/ton. After several months of continuous measures to ensure supply and stabilize prices, Is urea going to plummet this time? Is the demand really poor? What are the reasons for the price reduction?

Firstly, this year's low and peak seasons have disrupted the delivery rhythm of our industrial and agricultural customers. Unconventional price increases, such as from July to August, followed by unconventional price reductions, such as in mid October. After a weak fluctuation in November, the factory price of a large factory in Shandong fluctuated weakly from around 2500 yuan/ton in early November to around 2400 yuan/ton. In early December, the manufacturer's price was relatively good, but in mid December it was slightly worse. In the latter two days, the situation was even worse, as mentioned in the beginning of the article at 2300 yuan/ton.

This year, our industrial and agricultural customers have a more cautious mentality. Industrial customers will take appropriate actions to purchase goods in every round of temporary price reductions or small price drops from the manufacturer. Agricultural customers will also try not to purchase goods until the actual use of fertilizer is close, in order to avoid risks. Industrial customers are afraid of not being able to obtain spot goods because social inventory has always been relatively low, and the pressure on manufacturer inventory is relatively small; Agricultural customers are worried about price drops at any time, and they are also worried about having to bear more storage costs when picking up goods in advance. This is because information is becoming more transparent, and some media exaggerates the degree of price reduction or the possibility of a big drop in prices. Grassroots farmers are also similar to agricultural distributors, and try not to pick up goods until the end when fertilizer is close.

The advantage of this market atmosphere is that urea manufacturers are basically dominant, and they don't need to reduce prices too much to receive orders, especially when agricultural customers are actually using fertilizers. Occasionally, the increase in prices is also faster than expected. Of course, in the past two months, on the one hand, the strong measures taken by relevant departments to ensure supply and stabilize prices of spot goods, the repeated suppression of futures, and various false rumors in the market have led to relatively fewer speculative buyers. Especially in recent days, those industrial and agricultural customers who truly need fertilizer can get relatively lower prices, but is 2300 yuan/ton the bottom? Is the low-end price of 2200 yuan/ton in Shandong and Henan in mid October the bottom? Will it still return to the low-end factory price of 2000 yuan/ton in Shandong and Henan at the end of May? Everyone's hearts are filled with question marks.
Secondly, exports are becoming increasingly scarce. September is 1.19 million tons, October is 560000 tons, and November is 520000 tons. We believe that the November meeting will further reduce exports in December, and the new logo on December 21st may not have much to do with us. Moreover, the current offshore guidance price for small particle urea in China is around 348 US dollars per ton, international mainstream offshore prices range from 320 to 330 US dollars per ton, and low-end offshore prices range from 250 US dollars per ton, all of which have caused industry insiders to lack the hype of export and help cool down urea prices.

Once again, although the urea production is basically the lowest level since the winter of this year, with a daily production of about 155000 tons, slightly higher than the same period last year, mainly due to the new urea production capacity this year, everyone has taken into account the relatively low production from December to January as usual. Some gas urea companies have reserved urea in moderation, while some light storage and storage companies have taken appropriate delivery. As the transportation situation in various regions approaches the end of the year, some buyers have insufficient funds, Some industrial customers have called for an early holiday this year, and for now, the relationship between urea production and price is not significant.

In summary, urea is very abnormal. The intervention of large capital flows and policy interventions makes it more difficult to control the price. We hope that everyone can continue to operate cautiously and we are not very optimistic about the market next spring. However, we hope that the price decline can have a soft landing.