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Introduction: since November 11, 2023, the upward trend of prices in China's urea market has been curbed and began to show a gradual downward trend. So what are the reasons for the downward trend of urea prices? Let's start the discussion with this question.
Introduction: under the influence of the low season of agricultural demand procurement and low labor demand, urea prices are under upward pressure, coupled with the disappearance of China's export control and overlay profit space, the export willingness of Chinese urea enterprises has weakened, and China's participation in the new round of Indian bidding is limited. the negative impact of industry exports, although the current industry Nissan is low, the market is less negotiable, but it is not good for the market, and the purchasing atmosphere continues to be depressed. The overall market atmosphere is pessimistic.
Since the middle of November 2023, the spot market of urea in China has been deadlocked, and the price is stable and downward.
The agricultural market is in a period of demand gap, winter storage and wait-and-see period, industrial demand is often asked to buy at low prices, and the market buying mood is not high. in addition, under the influence of the guarantee policy, the market is limited in pursuit of high prices, and the lower reaches often enter the market at low prices, resulting in weak high prices and a slight price stalemate. On the other hand, the factory is affected by the gradual reduction of waiting for delivery, and the export continues to be negative, the price is loosened and lowered, and the ex-factory price is mostly determined according to its own receipt and accumulation, coupled with the continued negative performance of international exports, which weakens the export enthusiasm of urea enterprises. enterprises mostly focus on the Chinese market, and domestic sales make up orders one after another. In the enterprise inventory low, and one after another air head device maintenance shutdown, Nissan has reduced the expected impact, the price reduction is limited, the operation is strong, the market is caught in a dilemma.
As of December 30, 2023, China's urea small particle price index was 2392.27, down 13.55 per cent from the same period last year.
Since 2024, the market price of urea has continued to decline, and the factory has received orders before the Spring Festival, and the quotation has been lowered continuously.
At the beginning of this year, the demand of the urea market followed up better, and some enterprises with better receipts raised their ex-factory quotations slightly, the rise and fall of market prices showed a regional trend, and the overall situation of moving goods was also significantly better than that of a year ago, and the transaction began to pick up slightly, the volume of orders increased, and the overall market price rose slightly. However, with the influence of fear of heights downstream, the purchasing atmosphere began to gradually decline, prices continued to decline, and with the approach of the Spring Festival, most factories received orders before the Spring Festival, quotations began to be continuously lowered, and the supply of low-priced goods in the market appeared one after another, and prices continued to be pulled down.
As of January 15, 2024, China's urea small particle price index was 2340.14, down 16.12% from the same period last year.
Looking at the trend chart of urea small particle price index from November 11, 2023 to November 15, 2024, the price has fallen steadily, showing a continuous downward trend, and the market atmosphere is weak.
As of January 14, 2024, China's urea output this year was about 2.1756 million tons; daily output was 152500 tons, an increase of 5.06 percent over the same period in 2023. Nissan continued to decrease, overall higher than the 23-year level for the same period. Plant production is gradually declining, starting from mid-December 2023, gas enterprise devices continue to stop for maintenance, coupled with the depressed market demand atmosphere, poor delivery, enterprises stop temporarily, production reduction, Nissan gradually reduced, the current industry production low operation.
As of January 14, 2024, the operating rate of China's urea industry was about 70.44%, down 2.65% from the previous month and up 0.99% from the same period last year. The operating rate of China's urea industry fell within the week, slightly higher than the same period last year. At present, there are more parking of enterprise devices, gas restrictions of air head devices have been stopped and overhauled one after another, Nissan is running low, and market supply has reached a low point. In mid-late January 2024, air head maintenance devices will restart one after another, and the low utilization rate of production capacity in the industry will increase. Nissan will also gradually pick up, and urea prices will continue to be under pressure.
This round of bidding ends on January 4, 2024 and is valid until January 15, 2024. The latest shipping date is February 29, 2024, with a total of 21 suppliers, with a total supply of 2.7173 million tons, the lowest CFR316.8 per ton on the west coast and the lowest CFR329.4 per ton on the east coast. China's participation in the new round of Indian bidding is limited, and due to the influence of China's policy of ensuring supply and stabilizing prices, the willingness of enterprises to export has weakened, and this printing is difficult to become a key positive factor affecting the trend of market prices.
As of January 14, 2024, the port inventory of China's urea industry totaled 180000 tons, a decrease of 27000 tons and 13.04 percent over the same period last year.
At present, the price in the Chinese market is higher than that in the international market, the space for Chinese arbitrage disappears, and most enterprises are less willing to export, focusing on the Chinese market and carrying out Chinese orders.
Supply: the market supply continues to operate at a low level, and the supply is expected to increase gradually with the resumption of production of early air head maintenance equipment in the middle of this month.
Demand: industrial and agricultural demand is still average, local regional demand is slow to follow up, mostly rigid demand small order follow-up, wait-and-see atmosphere is still strong, the current market price continues to decline, it is expected that downstream or timely and appropriate replenishment, demand increment.
Exports: policy controls still exist, coupled with export restrictions still exist, exports face poor market impact, short-term negative impact on exports.
