As is well known, urea has not fallen much, and even most manufacturers have seen a slight increase in prices. They are welcoming the May Day holiday to receive payments, and our domestic urea market is relatively strong? Not entirely. On April 30th, which is the last working day before the holiday, some urea manufacturers in Henan province in Shanxi province lowered their prices to attract orders. During the holiday period, some manufacturers in Shanxi continued to slightly lower their prices, and some rebounded after falling.

By comparison, as of May 3rd, the international urea price has fluctuated from the previous week's ups and downs to the current comprehensive decline, with a weekly decrease of $3-13 per ton. What has happened to the international urea market? Can the domestic urea price continue the relatively good price trend before the holiday?

Firstly, there is a slight oversupply in the international urea market. The international mask prevention and control has ended early, and newly planned production capacity has been put into operation one after another. India alone has a total of about 3 million tons of new production capacity in recent years. According to incomplete statistics, more than 6 million tons of new urea production capacity will be put into operation in 2024. After India announced the bidding on March 15th, both international and Chinese urea companies did not take advantage of the situation to rise. The bidding price announced on March 29th was relatively high, at 339-347.70 US dollars per ton (landed price), which is equivalent to about 2150 yuan per ton produced by manufacturers in Shandong and other places in China. Soon after India invited suppliers to counteroffer, the final winning quantity was only 340000 tons, less than half of expectations, and international urea experienced its first deep decline this year.

On April 12th, China's urea can be exported for inspection. After 10-12 days of this news, international urea prices continued to plummet, and the low-end offshore price in the Baltic Sea was as low as $230 per ton, which is equivalent to a very low price in China. After China's urea export inspection and approval became stricter on April 19th, international urea stabilized and rebounded. According to theory, the current offshore guide price of urea in China is once again priceless and there is no market, and international urea prices should be mainly supported. However, as of May 3rd, international urea prices have generally fallen by 3-13 US dollars per ton. On the one hand, this indicates that the international market is unable to hold on, and on the other hand, it indirectly confirms that occasional price increases are also a slightly larger proportion of speculative increases in the context of slightly oversupply.

Secondly, the price of urea in China is temporarily relatively independent of the international market. At the time of the 10-12 day export inspection, our domestic manufacturers are basically aware that the price of urea exports from China is higher than international prices, and the number of export orders that can be signed is limited. News of various large export orders is just a rumor. Especially since the strict inspection and approval of urea exports in our country, the price of urea in our country has temporarily avoided international low price signing, coupled with the abnormal rise in futures on April 24th and 25th, and the irrational follow-up sentiment of spot manufacturers has once again gained the upper hand. The rise in urea prices welcomes the May Day holiday.

In contrast, after a brief period of international stabilization and rebound (the week of April 26th), international prices quickly fell in the week of May 3rd, and international urea prices were in jeopardy. Even if China's urea exports were to relax a bit again in May, our domestic prices would still be unable to borrow strength. After all, the low end offshore prices in the Baltic Sea could be slightly higher than $255/ton, after all, the factory price of urea exports in China may be less than 1700 yuan/ton.

Once again, urea in our country can now increase slightly if you want to. For example, keeping up with rising futures but not keeping up with falling futures. For example, local demand for large particle urea performs well, and our small particle urea can also take advantage of this opportunity to rise, but not too closely follow the decline. For example, some manufacturers that have already undergone maintenance in May will resume production, but two factories in Shandong, two factories in Hebei, one factory in Hubei, one factory in Shaanxi, one factory in Inner Mongolia, and some factories in Xinjiang have maintenance plans. Urea manufacturers may take this opportunity to increase prices. The current price increase is completely disregarding the high daily urea production of 175000 to 18000 tons, completely overdrawing various positive factors. For example, maintenance is a later matter, but most manufacturers are now using price increases to promote transactions. For example, if factories stop receiving and increase prices, downstream buyers may take appropriate delivery, which may also overdraw the demand for fertilizer in the summer market during the peak season.

In short, there is no need to pay too much attention to the temporary international decline. At first glance, domestic urea manufacturers still want to try their best to raise prices. Prices may fluctuate slightly in May, but if compound fertilizer factories calm down in mid to late May, the bottom fertilizer in the Central Plains region and the top dressing fertilizer in Northeast China should not be too anxious, and the prices should have a moderate cooling.