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Urea: There is only one reason why it rises 50% during the off-season!
Time:2025-07-25   Read:16second  

The recent urea market has made people even more helpless. Although some customers had a premonition as early as a month ago that urea would not fall much during the summer and autumn break this year, I agree and am also looking for reasons why it may fall a little more. Although the off-season has arrived and there are plenty of reasons for the decline, the factory price of urea in Shandong, Hebei and other places has risen by 50 yuan/ton to 1790-1830 yuan/ton last weekend and early this week. The only reason for the off-season price increase is that there is not much pressure from all parties, and if we can raise the price, we will raise it!

The urea manufacturer doesn't have much pressure. Just entering the off-season for agricultural demand, industrial customers such as compound fertilizer factories can still obtain goods appropriately, especially with relatively high prices of phosphorus and potassium. Autumn is also a season of high phosphorus and high potassium, and there will be no rapid and significant price reduction due to urea. Downstream customers can store a large amount of urea. In terms of weather, just entering the summer season, the demand is also good. Downstream customers are only making shallow attempts to obtain urea and compound fertilizers for the autumn market in October.

There is some cost support for urea manufacturers. For example, coal prices may not continue to decline due to factors such as the closure of some small coal mines, but occasionally stabilize and increase slightly. Just as the gas head urea manufacturer lost over 100 yuan/ton, it was heard that the secondary export quota would be appropriately biased towards those gas head urea manufacturers participating in the supply guarantee, which can be said to be a stable word.

A small number of urea manufacturers have carried out maintenance one after another, and they have once again hyped up the technical renovation and shutdown of Jincheng urea manufacturers. Although two factories have already shut down, the impact is becoming smaller, but overall, the mentality of urea upstream and downstream is not particularly bad.

Traders and futures traders don't have much pressure. For example, in the first half of June, there was a sharp decline, and the price increase in the second half of June was not very successful. However, in the first half of July, urea manufacturers and large traders worked hard to stabilize prices and raise prices, which did not cause the price performance of urea in the fertilizer market to be too poor. Agricultural distributors also sold urea according to their department. Especially for urea futures traders, they have been cooperating with the rhythm of urea manufacturers raising prices. Whenever urea manufacturers continue to lower prices to attract orders, there are futures traders who take the goods. They can make certain profits in the spot or futures market at the right time, but there are also times when they lose money.

Traditional dealers may experience some pressure, but not particularly significant. I forgot about the pain of the scar. Purchasing urea several times can result in both profits and losses, even if it is a continuous loss. It is estimated that the losses are not significant because we have seen more and more outsiders entering the urea spot market. They are very cautious every time they purchase, and may lose tens of yuan per ton or earn ten yuan per ton. Urea is not easy to handle, and other industries are even more difficult to handle. Every time the price of urea manufacturers drops rapidly, these traditional distributors still cannot help but take advantage of it.

In addition, the price of 1720-1730 yuan/ton for factories in Shandong, Hebei, Henan and other places is a bit interesting. Just as it fell to this price in late September 2024, it increased by nearly 200 yuan/ton in conjunction with the autumn market. Of course, the price at the end of 2024 was even lower. In the second half of 2025, the cost of urea has been reduced to a certain extent, but under ambiguous speculation and expectations about exports, various speculations about domestic and international price limits, and the support of various people inside and outside the urea industry, the price of urea is still trying to rise.

In summary, since the term 'urea price hike' has already been used and it is already the relatively off-season in the second half of July and the first half of August, with a daily production of urea still reaching around 195000 tons, it is still necessary to be alert to the possibility of a new round of price drop at any time. In the next article, the author will continue to explore the price drop of urea.

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