Recent price trends of urea
According to the Commodity Analysis System of Business Society, the domestic urea market price has slightly increased this week, with urea prices rising from 2577.14 yuan/ton at the beginning of the week to 2640.00 yuan/ton at the weekend, an increase of 2.44%. Weekend prices increased by 12.24% year-on-year. On August 20th, the urea commodity index was 122.79, unchanged from yesterday, a decrease of 19.39% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 120.85% from the lowest point of 55.60 points on August 17th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)
Good cost support, weakened downstream demand, and tight urea supply
From the supply side perspective, the mainstream price of urea in China has slightly increased this week.
From the data of the upstream and downstream industry chains, it can be seen that the urea upstream market has slightly increased this week: the price of liquefied natural gas has significantly increased, from 3652.00 yuan/ton at the beginning of the week to 3772.00 yuan/ton at the weekend, an increase of 3.29%, and the weekend price has decreased by 43.53% year-on-year; The price of anthracite has stabilized at a low level, with the price of Yangquan anthracite (washing medium block) at 1130 yuan/ton this week; The price of liquid ammonia has slightly increased, rising from 3366.67 yuan/ton at the beginning of the week to 3400.00 yuan/ton at the weekend, an increase of 0.99%. The weekend price has decreased by 9.33% year-on-year. Upstream raw material prices have slightly increased, providing good support for urea prices. This week, the downstream melamine price of urea has stabilized at a low level, with a price of 7075.00 yuan/ton.
From a demand perspective: Agricultural demand has weakened, while industrial demand is average. The use of fertilizers in summer has basically ended, with sporadic fertilizer supplementation being the main focus, and agricultural demand has weakened. The operating rate of the compound fertilizer plant is average, and the enthusiasm for urea procurement is normal. Board and melamine enterprises are operating at a low level, with a focus on purchasing on demand. From a supply perspective, the daily production of urea is around 160000-170000 tons, indicating a tight supply.
Small fluctuation and decline in the future market
In late August, the domestic urea market may experience a slight fluctuation and decline. Business Society urea analysts believe that the upstream market of urea has slightly increased, and urea costs are well supported. But downstream agricultural demand has basically ended, and industrial demand is average. The daily production of urea is around 160000-170000 tons, and the supply is tight. In the future, urea may experience a narrow range of fluctuations and decline.
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