China’s domestic demand continues to decline and urea prices continue to fall

Last week (July 29 – August 2) domestic demand continued to decline, urea market prices continued to fall. On August 5, China’s urea wholesale price index (CNPI) was 1957.31 points, down 13.12 points annually, or 0.67%. It rose 24.31 points, or 1.26% year-on-year, or 94.06 points, or 5.05% in the bi-base period.

On August 5, China’s urea retail price index (CNRI) was 2076.22 points, down 15.09 points, or 0.72%, up 22.80 points, or 1.11%, from a year earlier, and up 171.26 points, or 8.99%, in the bi-base period.

On August 5, China’s Urea Export Price Index (CNEI) was 1864.62 points, up 1.13 points annually, or 0.06%; 13.87 points, or 0.75%; and 5.62 points, or 0.30%, in the bi-base period.

Supply situation

Last week, some domestic urea overhaul enterprises stopped, and the start-up rate decreased. The overall start-up rate of domestic urea enterprises dropped to about 70%, among which the start-up rate of coal enterprises fell to about 69%, and that of gas enterprises rose to about 74%. In terms of raw materials, the domestic coal market was stable and prices were stable last week, while natural gas market prices rose last week.


Demand situation

In agriculture, domestic demand for agriculture has declined. On the industrial side, the new fertilizer sheet of domestic compound fertilizer enterprises in autumn has basically ended, the pressure of environmental protection is still sustained, the construction of compound fertilizer and rubber sheet plants remains low, and the demand for urea is weak. Internationally, there is no obvious demand support in the international market after the labeling.

international market

Last week, when India’s bidding period ended, the international market was well supplied and prices fell. Among them, the black sea small particle urea FOB price has dropped 8 US dollars/ton compared with the low and high-end prices, which is 255-257 US dollars/ton; the Baltic small particle urea FOB low-end price has fallen 5 US dollars/ton, the high-end price has fallen 1 US dollars/ton, which is 260-265 US dollars/ton; the Middle East small particle urea FOB price has remained stable, which is 275 US dollars/ton.- US$280 per ton; China’s FOB price of small granular urea has fallen by US$6 per ton from the low-end price and US$4 per ton from the high-end price to US$275-278 per ton.


Domestic situation

Last week, urea prices in various regions of the country fell mainly on a weekly basis. Among them, the prices of Hebei, Jiangsu, Anhui, Fujian, Shandong, Hubei, Hunan, Guangdong, Guangxi, Sichuan, Shaanxi, Gansu and Xinjiang fell by 3.3-50 yuan/ton, while those of Hebei and Yunnan rose by 3.1 yuan/ton and 29 yuan/ton respectively, while those of the rest of the region remained stable.

Future Market Forecast

At present, domestic agricultural fertilizer has entered the end stage, demand has been reduced; in industry, environmental protection has maintained a high pressure, fertilizer demand has basically released in autumn, compound fertilizer enterprises are mainly on the lookout, the start-up rate is difficult to rise, and the overall demand is weak. On the export side, the international market is oversupply, prices are falling, and domestic supply opportunities are small. In summary, it is expected that urea prices will keep a downward trend in the near future, and attention should be paid to the autumn fertilizer market sales.