Since last week, the price of urea has decreased, and there is still a downward trend this week. As of this morning, the mainstream ex factory price of urea in Shandong region is 2160-2260 yuan (ton price, the same below), composite fertilizer enterprises in Linyi region have received urea at 2240 yuan, mainstream ex factory price of urea in Hebei region is 2210-2220 yuan, mainstream ex factory price of urea in Henan region is 2200-2250 yuan, mainstream ex factory price of urea in Shanxi region is 2170-2180 yuan, and large particle price is 2350 yuan, According to industry reports, market news is frequent. Once there is news in the market, downstream markets have poor resilience, and their prices may change in the short term. Recently, urea prices have continued to decline, mainly due to the following reasons:

Firstly, there is still a lack of support for exports. On December 21st, India announced that it had received a total bid of over 2 million tons in the new import bidding that was closed on January 4th. The lowest bid prices were in the West Coast CFR316.8 $and East Coast CFR329.4 $, equivalent to Shandong's factory price of around 2000 yuan/ton. Although the Indian bid has nothing to do with us, the lowest bid price India received seems to have further undermined the confidence of domestic manufacturers, It is reported that the National Development and Reform Commission has held a meeting on fertilizer trade and producers, which mentioned that the excess urea in China may be considered for export, and quota control should be implemented. Currently, there is no positive news on exports.

Secondly, daily production is at a relatively high level. According to Zhongfei.com, since 2023, the minimum daily physical production of urea has remained above 140000 tons, with a general daily production of 160000-170000 tons. Currently, the daily production is 159000 tons, and there has been a slight fluctuation in recent construction. Most gas head enterprises in the northwest and southwest of Henan, Inner Mongolia, are already in the winter maintenance period. After January 20th, a few gas head enterprises may resume production, and it is expected that production will increase in the future. Downstream efforts are being made to avoid price reduction risks, Dare not rashly hoard a large amount of urea.

Again, the cost of urea is relatively low, and domestic coal supply is at a relatively high level this year. Although coal prices have occasionally fluctuated, most factories still have a certain profit margin from the perspective of urea prices. Since 2023, except for a few factories that have shut down due to plant shutdown, the production of most other factories has remained high. From the calculation of urea prices and costs, most urea factories still have a certain profit margin, There is no sign of a significant increase in coal prices recently, so downstream companies only purchase urea in moderation to avoid risks and dare not reserve too much.

Finally, the demand for urea in the later stage shows a decreasing trend. As the Spring Festival approaches, the demand for industry and agriculture may decrease, and the stocking progress of grassroots agricultural markets before the Spring Festival will slow down, turning to wait-and-see; Small and medium-sized agricultural input merchants also make up for scattered purchases as needed. Some industrial compound fertilizer factories have short-term parking plans before the Spring Festival, which will reduce the demand for urea. In addition, the operation of plywood factories will also decrease, and logistics will be affected near the Spring Festival, so urea demand may decrease in the future.

In summary, urea prices have shown a downward trend recently, and the rebound of urea should be relatively limited. In the future, we will mainly focus on the resumption of production plans and export situation in various regions.