Analysis of Urea price

Analysis of Urea price

Urea fell a good difficult ah!Believe this is the spring urea industry has been in the mind of doubt, urea has not gone up again, today, Shandong Lianghe urea factory offer 2910-2950 yuan/ton, has fallen for three or four days, urea prices are still high, not to mention the end of March last year, Shandong Lianghe urea factory only 2100-2150 yuan/ton,In march alone, urea prices rose by about 300 yuan/ton.
Why is urea so expensive this spring?There are three possible reasons:

First, demand has been strong in the spring, so much so that agricultural buyers' lingering hesitation and reluctance to buy have failed to bring down urea prices.Plywood factory and compound fertilizer enterprise demand wave after wave, the Winter Olympics ended, plywood factory procurement demand will increase, during the two sessions of the goods is also good, especially plywood factory and compound fertilizer enterprises are more cautious to take orders for production, do not pay too much attention to urea price to purchase urea,This kind of steady profit/guarantee operation brings the purchase quantity of urea is sometimes very concentrated, and urea price goes up again and again.
On the evening of March 11, the central finance again issued a one-time subsidy of 20 billion yuan to actual grain farmers. This news coincided with the end of the two sessions and increased industrial demand. Urea soon rose again.Late March 14, the National Development and Reform Commission announced in March this year, the first batch of 2022 more than 300 ten thousand tons of spring fat reserves have begun to market, compare clear is that these goods are all 12 companies self-sustaining, coincided with the increase in the price of urea, 12 companies natural slowing sales pace, the news brings to the urea market where there is little bad.

Second, although the export volume is small, but the export price is high, there are always some industry insiders expect long-term large export.In terms of legal inspection and assistance to other countries, urea exports in January-February are about 80,000 tons and 150,000 tons respectively, and in January-February 2021 are 290,000 tons and 140,000 tons respectively, with a year-on-year decrease of 70.8% and year-on-year increase of 2.1%.Roughly speaking, we only exported 200,000 tons of urea in 2022. Assuming that part of the 200,000 tons of urea was exported in the form of melamine and plywood, is it natural for urea to rise in price?
Export prices high, either based on the agreement between the government, or very little by the method of the export price of urea is close to other the price of the urea supply in the world, as well as the whole China size granular urea in January offshore guided prices in 565-570 dollars/tons, February is similar, most of the time on February 24, Russia and Ukraine since the war,Also are the Chinese size granular urea in March offshore guided prices vary with the international rally surged to $700 / ton and then eventually reached $900 / ton, these a few price either way out for conversion, and domestic ex-factory price is surprisingly high, compared to domestic factory in March 2650 yuan, up to the highest of nearly 3000 yuan/ton,Even if it falls to the current 2910-2950 yuan/ton, the profits of middlemen are as high as ever. To say the least, even if it is the export of 1000 tons of high-priced urea, some people in the industry will look forward to a possible large number of exports.Of course, the 300 yuan/ton increase in March is understandable in the international context.

Third, relevant departments are trying their best to ensure supply, but the epidemic has slowed down the flow of urea, so the price has risen so much.From last November, Shanxi urea reduced winter production and production time, the price of natural gas in December and quickly fell, the winter maintenance time of gas head urea was greatly shortened than in previous years, to 20 billion subsidies, to winter fertilizer storage, to summer fertilizer bidding.Although the low price of urea actually be born with an imaginary situation there are some discrepancy, but after all, we didn't as high as international urea, farming costs also increased, can let a part of the agricultural buyers have been feeling the price is high, sales no profit, worry about prices tumbled, did not dare to buy, increases with the increasing in the operation of the pin coincides with the outbreak, makes the market of urea at the grass-roots level slightly insufficient,Instead, it caused a surge in urea.

Post time: Apr-01-2022