Urea rises again in the short term, and the market order needs to be sorted out
In terms of spots, the mainstream prices in Shandong, Henan, and Hebei exceeded 3,000 yuan/ton. The current mainstream ex-factory quotations in the Shandong area are 2990-3060 yuan/ton, the mainstream ex-factory quotations in the Henan area are 2940-3010 yuan/ton, and the mainstream ex-factory quotations in the Hebei area are 3060-3080 yuan/ton. In terms of futures, the closing price of the main contract UR2201 of urea futures on October 12 was 3313 yuan/ton.
Stimulated printing, the international price of urea soared
During the National Day, India’s RCF Company’s new round of bidding results showed that India had received quotations from 12 suppliers with a total supply of approximately 1.9 million tons, of which 830,000 tons were on the east coast and 1.02 million tons on the west coast. In the end, the Indian RCF Company confirmed a total of 732,000 tons of goods for 665.5 US dollars/ton. According to industry insiders, “Among them, there are about 600,000 tons of goods from China, accounting for the vast majority of this tender. The rhythm of the airport." Calculated at the exchange rate of RMB 6.45 per US dollar, the lowest CIF price on the East Coast is RMB 4,293/ton. Regarding the price of this Indian tender, some insiders called out: Poverty limits my imagination.
Concerning the Indian bidding price, excluding ocean freight and port fees, the CIF price of 4300 yuan/ton can still support the domestic ex-factory price of urea in Shandong at about 3800 yuan/ton, which is still 700-800 compared with the current domestic price. The price difference of RMB/ton. Therefore, considering the price of the printed label alone, the domestic urea price still has room for a certain increase.
“The recent price of urea is too high. Many exhibitors at this Changchun Agricultural Supplies Conference are afraid to bid. The dealers are also panicked. The price is too high and farmers cannot afford it. They can only sell on credit. Too high.” According to Hu Yuxin, deputy director of the General Department of Jilin Beifeng Agricultural Means of Production Co., Ltd., the price of urea at this stage is mainly affected by exports. It's too low, one price a day, now it can only look at the international market, or the country's policies to regulate and control.
At this stage, transactions in the Northeast market are active, and the purchase of raw materials for large-scale compound fertilizer plants has started, but the overall operating rate is still lower than last year. As market prices have risen too fast, terminal market quotations are chaotic, traders' risk aversion has increased, and purchasing enthusiasm has declined. There are still a small number of orders for replenishment in export collection ports, but it is difficult to purchase.
Supported by raw materials, market prices need to be sorted out urgently
It is understood that some devices have resumed production in an orderly manner after the National Day. In terms of supply, the current daily output of urea has rebounded to about 156,000 tons, a year-on-year decrease of about 3 million tons, and the operating rate is about 65.9%. The time for Mingshengda to produce products is yet to be determined, a set of Hualu plants will be discontinued, and the time for the resumption of production of Shandong Mingshui Chemical is to be determined. Market demand remains weak, but manufacturer prices are still rising. Although there are not many new orders from manufacturers at present, the overall daily transaction volume can still be maintained, and there is no pressure on shipments for the time being.
The cost of raw materials continues to increase, and urea production involves steam coal, bituminous coal, and anthracite. According to a urea product analyst at a futures company, since August, the price of raw coal has continued to rise, among which the price of thermal coal has risen the most, and the prices of anthracite and bituminous coal are at historic highs. In addition, due to heavy rainfall in Shanxi Province, some coal mines have temporarily halted production. Although the coal supply has recovered somewhat recently and the tight coal supply situation has improved slightly from before the holiday, coal prices are expected to remain high in the short term.
In terms of natural gas, the international price of natural gas has continued to rise since the beginning of this year, and the production of international urea companies has been greatly affected. Some urea manufacturers in individual European countries have stopped production and reduced production due to the skyrocketing natural gas prices, which has also helped to some extent. The situation of insufficient international urea supply. It is understood that the price of raw material natural gas for domestic gas-head urea companies has increased by about 30% this year, and industry insiders said that domestic gas-head urea companies are still facing a tight supply of raw materials this winter. Although the market price has hit a new high, the actual production profits of the company have not expanded simultaneously.
It is worth noting that with the shortage of energy supply, extreme weather changes may become an unstable factor that exacerbates the volatility of commodity prices. It is currently reported that there is a high probability that the La Niña phenomenon will be ushered in this winter. The cold weather caused by it may benefit the energy, coal, urea fertilizer, and other related industry chains, and intensify the market’s worries about winter energy shortages, which will push it up to a certain extent. Prices of bulk commodities such as natural gas, heating oil, coal, and chemical fertilizers.
On the whole, driven by international prices and raw material costs, the urea market as a whole is currently showing a relatively chaotic situation, and the industry circulates that there may be news about export control in the later period, leading to cautious quotations of upstream factories and downstream distribution. The merchants did not dare to take the goods, and the scene fell into a stalemate for a time, and the market price urgently needed to be sorted out. How to ensure the smooth operation of the market has become the focus of the industry. The market outlook needs to pay close attention to international price trends and policy news.
