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 2377.50 yuan/ton at the beginning of the week to 2404.38 yuan/ton at the weekend, an increase of 1.13%. Weekend prices fell 26.02% year-on-year. On June 11th, the urea commodity index was 111.83, unchanged from yesterday, a decrease of 26.59% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 101.13% 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)

Cost support is average, downstream demand is good, and urea supply is sufficient

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 there have been ups and downs in the urea upstream market this week. The price of liquefied natural gas has slightly increased, rising from 3520.00 yuan/ton at the beginning of the week to 3666.00 yuan/ton at the weekend, an increase of 4.15%, and the weekend price has decreased by 41.92% year-on-year; The price of Anthracite dropped slightly. This weekend, the price of Anthracite (washing block) in Yangquan was 1060 yuan/ton, down 100 yuan/ton; The price of liquid ammonia fluctuated and increased, rising from 2983.33 yuan/ton at the beginning of the week to 3000.00 yuan/ton at the weekend, an increase of 0.56%. The weekend price decreased by 42.57% year-on-year. Upstream raw material prices fluctuate, providing general support for urea prices. This week, the downstream melamine price of urea significantly decreased, dropping from 7125.00 yuan/ton at the beginning of the week to 6600.00 yuan/ton at the weekend, a decrease of 7.37%.

From the perspective of demand, agricultural demand has increased while industrial demand is normal. In some southern regions, rice has started to prepare and use fertilizers, leading to an increase in agricultural demand. The operating rate of the compound fertilizer plant is acceptable, and the enthusiasm for urea procurement is average. The board and melamine enterprises are operating normally, and the main focus is on purchasing just in need. From a supply perspective, the daily production of urea is around 160000-170000 tons, indicating sufficient supply.

Small fluctuation and decline in the future market

In mid June, the domestic urea market may experience a slight fluctuation and decline. Business Society urea analysts believe that the upstream of urea has slightly declined, and the cost support for urea is insufficient. The peak agricultural season in the downstream has not yet begun, and high nitrogen compound fertilizers have basically ended. Industrial demand is normal. The daily production of urea is around 160000-170000 tons, with sufficient supply. In the future, urea may experience a narrow range of fluctuations and decline.