The bidding for urea in India has been announced, with a total bidding volume of about 3 million tons. The lowest bidding price is 494-495 US dollars/ton (landed price), which is nearly 100 US dollars/ton higher than the bidding price of 399 US dollars/ton in June. The price is higher than expected, stimulating the rise of domestic urea prices. Urea companies are tentatively raising their prices. The relevant parties have also officially announced the guidance prices for nitrogen fertilizers: urea export guidance price (FOB) of $440/ton, large particle price of $445/ton, and vehicle price of $445/ton.

The high price of international urea once again provides strong support for the domestic market, and urea spot factories have raised their prices to stimulate downstream markets, promoting transactions through price increases and supporting the market for customers. In the context of a significant increase in international prices, China has raised export price limits. The introduction of price limits has provided conditions for the implementation of secondary quotas, which may be implemented in the near future. Although it is unlikely to be exported to India, capital speculation will also be focused on secondary quotas and high urea prices in India.

The domestic urea supply is sufficient, and the situation of oversupply in the domestic urea market still exists, leading to market sentiment differentiation. Some customers will replenish appropriately due to international high prices, while others are skeptical about the sustainability of the current domestic urea price increase and adopt a wait-and-see attitude. The main contradiction lies in the implementation of a quota system for China's exports, which is not ideal for aligning with international urea standards. There is a significant price difference between domestic and international markets, and the initial quota quantity is limited. The market is still waiting for specific news on the implementation of the secondary quota. If it can be implemented and the quantity meets or exceeds expectations, it may further support the urea market price.

Currently, some urea enterprises in China are undergoing maintenance or short shutdowns, resulting in a slight tightening of urea supply. However, production capacity and output are still at historical highs, and supply and demand pressures still exist. In the past two days, the announcement of urea bidding in India has boosted market sentiment, and some companies also have export orders to support it. In the short term, urea prices are likely to be strong, and the specific situation still needs to wait for the second quota. If we only look at domestic supply and demand as well as policies to ensure supply and stable prices, the upward space for urea domestic trade prices is relatively limited.

Ammonium sulfate, which is also a nitrogen fertilizer and commonly used as a substitute for urea, has once again been boosted by international urea. After the announcement of the urea bidding in India, the enthusiasm for purchasing in the domestic ammonium sulfate market has improved, and the transaction price has surged again. Yesterday, some factories bidding for ammonium sulfate increased by more than 100 yuan/ton. The price increase of coking grade ammonium sulfate factories in Shandong region has basically exceeded 100 yuan/ton to around 1250 yuan/ton. Rare earth customers and extrusion pellet factories in Shanxi region have made purchases this week, but the price increase range is relatively large due to factors such as transportation, customer groups, and bidding time, ranging from 30-130 yuan/ton. The price increase in Hebei region is slightly lower than other regions at 30-60 yuan/ton.

In summary, the international urea market has once again boosted China's ammonium sulfate market. Last week, the purchasing sentiment of most ammonium sulfate customers decreased due to various reasons such as high inventory, and the ammonium sulfate market also experienced a rational slight correction for several consecutive weeks. Affected by the sharp rise in printing prices, the bidding for ammonium sulfate increased significantly in many places yesterday, with squeezing particle factories, export traders, and rare earth intermediaries participating in the procurement. Next, there is a high probability that ammonium sulfate will rise. Some factories that bid earlier this week will make up for the increase next week. Chinese traders will also promote negotiations on international orders and need to closely monitor international orders and price trends.