Urea is constantly breaking the low price record since 2024. The ex factory price of urea in some regions has fallen below 1600 yuan (ton price, the same below), but it seems that it has not yet reached the bottom and has not stimulated the downstream market's reserve willingness. On the contrary, the mentality of the downstream market has been greatly affected, and the purchasing willingness has significantly decreased. The atmosphere of buying up instead of buying down has intensified. At the same time, the small nitrogen fertilizer ammonium chloride is also trembling, with its low price advantage weakened, market sentiment affected, and its own supply and demand performance weak.

At present, the prices of both nitrogen fertilizers are running at a low level, with prices continuing to decline. However, urea is accelerating its decline, while ammonium chloride is experiencing small or localized fluctuations. According to statistics from China Fertilizer Network, the mainstream ex factory price of urea in Shanxi region is around 1550-1640 yuan, in Shandong region it is around 1570-1650 yuan, and in East China region it is around 380-410 yuan. The price difference between the two has narrowed, and the next trend will be seen from the perspectives of supply and demand, cost, and policies.

As the Spring Festival approaches, the supply-demand imbalance in the urea market will become increasingly apparent. Firstly, according to statistics from China Fertilizer Network, the daily production of urea is about 176000 tons, which has been in a high load production state for a long time. The new physical production in 2024 will increase by about 5 million tons compared to 2023, and some new urea production capacity will still be prepared for production in 2025. After the new production capacity is released, there will be a certain increase in production, which means that the pressure on the supply side will continue to increase; In the short term, the high load of urea production has increased inventory pressure for enterprises, coupled with the weak liquid ammonia market and significant price reductions. It is not ruled out that some enterprises may slightly shift their production focus towards urea; Furthermore, in addition to the high inventory pressure of urea companies, there is also a certain amount of inventory to be digested in downstream markets; However, the demand performance is poor. In addition to policy tightening in the face of urea exports, the overall domestic demand is light, and the industrial sector purchases according to demand. Before the Spring Festival, some downstream fertilizer enterprises or plate factories have expectations of reducing load, resulting in a decreasing trend in urea procurement; In terms of agriculture, the grassroots use of fertilizers is low, the willingness to reserve is not high, and the amount of goods obtained is scattered. However, frequent adjustments in the futures market have a flexible impact on urea. Overall, in the short term, there is an oversupply of urea in the market, but demand is weak, and it is expected that the overall market will mainly operate weakly.

Although the impact of urea on ammonium chloride has not been significant since 2024, as its price gradually drops to around 1600 yuan, pessimistic sentiment will also be transmitted to the ammonium chloride market, and the low price advantage will become increasingly less apparent. In addition, there is a gradually apparent supply-demand contradiction in the ammonium chloride market itself. Recently, due to environmental inspections and cost pressures, only sporadic ammonium chloride enterprises have reduced or stopped production. According to statistics from China Fertilizer Network, the overall industry operating rate of existing alkali enterprises is as high as about 88%, with sufficient supply or even partial surplus; But the demand is gradually decreasing. On the one hand, the operating rate of compound fertilizer plants is not high, and the demand for ammonium chloride is limited. In addition, the low price of urea makes compound fertilizer plants more inclined to purchase urea; On the other hand, traders have a pessimistic outlook on ammonium chloride, especially considering the sufficient supply after the release of local new production capacity in the later stage. Currently, their willingness to stockpile a large amount of ammonium chloride is not high.

However, the price of ammonium chloride is running at a low level, and the price of the main product soda ash is also low. The cost pressure on joint alkali enterprises is obvious, supporting the upward trend in the ammonium chloride market; Furthermore, the export volume of ammonium chloride is considerable, providing support for the domestic market. Overall, the ammonium chloride market has been sluggish recently, with low-end prices remaining stable after a decrease. Some high-end prices may have the risk of falling behind, but the extent should be limited. The overall market sentiment should not be overly pessimistic.