Urea price fluctuations

Since September, urea prices have continued to fluctuate. Taking Shandong as an example, the highest price rose to 1,630 yuan/ton, and the lowest price also dropped to 1,580 yuan/ton. Frequent fluctuations in prices are mainly supported by agricultural fertilizers. Rising Group Co., Ltd. Sales Manager Liu Yuchang told the reporter: “The recent price changes in the Shandong region are relatively frequent, but overall, the market has basically remained relatively stable, affected by grassroots dealers getting goods at prices below 1,580 yuan/ton. There will be dealers to get goods, once the price increases, the market is relatively stagnant, with the gradual digestion of the supply, the price falls, dealers will replenish again.”

Although the price of urea in Henan Province has not changed frequently in Shandong, the support of agricultural fertilizers cannot be ignored. Yang Tongyu, sales manager of Henan Jinkai Group's Yanhua Chemical Fertilizer Co., Ltd., said in an interview: “Henan area is currently at the bottom of the wheat fertilizer preparation period. Due to the continuous decline in urea prices, the price was significantly lower than the same period of last year, so the grassroots distributors prepared the fertilizer. It is true that this is the main reason why the current price remains stable.” The mainstream ex-factory price of urea in Henan is currently 1,630 yuan/ton. Although the price is slightly higher than Shandong, the price has fallen by nearly 400 yuan compared with the same period of last year. / Ton, recent grass-roots distributors are actively stocking.

This is even more true in the Northeast. Feng Yanfeng, general manager of Liaoning Jinyu Agricultural Assets Co., Ltd., said: “At present, the ex-factory price of urea in Liaoning is 1,680 yuan/ton, the price is increased by 30 yuan/ton from last week, and the price of urea is raised at a low level. This is mainly due to small and medium-sized The purchase of the dealers is driven by the purchase of small and medium-sized distributors because the current price has fallen below the cost line, and the other reason is the demand for BB fertilizer production.”

Compared with exports, agricultural demand has become the main support for current urea prices. This is mainly because the export transaction price for this year is relatively low. Although the export volume is higher than the same period of last year, according to the survey conducted by the reporter, the export has not been given to enterprises. Bringing profits, many companies said that this year's exports have only eased pressure on the stock.

The price decided to light up the start of the time from the survey point of view, the fluctuations in the market in September was mainly driven by getting goods from small and medium-sized dealers, and large circulation companies did not wait for the opportunity, mainly because the current price is still to achieve the ideal Price. Feng Yanfeng said: "This year, the tender for chemical fertilizers has been started. Although circulation companies are actively bidding, the enthusiasm for getting goods is not high. The main reason is that the large-scale circulation enterprises that had been stored lightly last year suffered losses. Even if the current price Already at a low level, circulation companies are still afraid to get goods easily."

Judging from this year's policy of light storage and tendering, this year it will again increase 2 million tons to 18 million tons, and urea, which is a kind of light reserve, should account for more than 70% of the scalar quantity in principle. In some regions, the storage and storage enterprises can appropriately reduce the proportion of urea according to the local fertilizer demand. But not less than 50%. On the surface, this year's policy of lighter deposits is conducive to the stability of the urea market, but from the actual situation, the situation of light storage may not be optimistic. Yang Tongyu said that because the current price of urea has not yet bottomed out, it is said that large-scale circulation companies will still maintain a wait-and-see attitude. "Recently, although the urea market has remained relatively stable, most of the goods are mainly small and medium-sized distributors, which have limited market pull. Large-scale circulation companies are basically waiting to see and expect to get goods at a reasonable price. Clearly, the current price There is still room for decline."

The market game continues. As the price falls, the current days of urea companies are not too good. According to the statistics of the reporters, after entering September, the operating rates of urea enterprises in Shandong, Hebei, northwest, and northeast China have varying degrees of Lowering this also shows that the loss of the urea industry is expanding.

Market outlook or will continue to explore the bottom of the urea business operating rate reduction will inevitably increase the company's production costs, because the stability of the price to become the consensus of the industry, but it is undeniable that because the current price has not been considered by the market, the market outlook will continue to bottom or will Hard to avoid.

Feng Yanfeng believes that in the short-term, prices may rebound in some areas, but this is only in the warm heart, after the export window period closed, the market will stagnate, prices will still fall. In the face of the current market, production companies can only strengthen cooperation with circulation companies and jointly undertake risks to cope with the market downturn. Baodi, interest-bearing, and the Fed will become a magic weapon for companies to operate the market.

Yang Tongyu also believes that the current price of urea has not yet bottomed out, but the downside is limited. “As long as light reserves are still in place, urea prices may still bottom out. It is expected that the price will drop to 1500-1550 yuan/ton, and large distribution companies will start to take delivery. It is expected that the end of October to early November will be the most urea companies. In difficult times, the export window is closed, the agricultural fertilizer is in the off-season, and the price may bottom out.With the start of the light storage, the urea price will bottom out, and in February next year, the price is expected to rise again to 1700 yuan/year. Ton.

Overall, the current situation of the urea market is not optimistic, with some areas may rebound, but in the case of adequate market supply, the current market is still in a downtrend, the price is really very much still to wait.