Recent trends in urea prices

Agricultural fertilizer preparation has been gradually launched, and urea prices in Shandong have slightly increased this week. According to the Commodity Analysis System of Business Society, the price of urea in Shandong increased from 2508.33 yuan/ton at the beginning of the week to 2516.67 yuan/ton at the end of the week, an increase of 0.33%, and the weekend price decreased by 10.47% year-on-year.

From the supply side perspective, some gas companies have resumed production and started operating higher. The data shows that the operating rate of domestic coal urea enterprises this week is about 86.1%, while that of gas urea enterprises is about 85.8%. The daily urea production in China is about 190000 tons. The mainstream urea manufacturers in Shandong saw a slight increase in factory prices during the week.

From the upstream market, it can be seen that the urea upstream market has risen significantly this week: the rainy and snowy weather has ended, leading to a significant increase in production by gas companies, an increase in terminal demand, and a good trading atmosphere. The price of liquefied natural gas surged 7.24%, and the weekend price fell 41.35% year-on-year. The price of smokeless coal has slightly increased, with the price of Yangquan smokeless coal (washing medium block) increasing by 33 yuan/ton to 993 yuan/ton over the weekend. Overall, the significant increase in upstream raw material prices has increased support for urea prices.

From the perspective of downstream demand: winter wheat fertilizer preparation is gradually being launched, agricultural demand is gradually increasing, and industrial demand is adapting to the market. Composite fertilizer companies are experiencing an increase in production, while board and melamine companies are operating at a low level, with a focus on essential procurement. This week, the downstream price of melamine in urea has stabilized at a high level, with a price of 7475 yuan/ton. From the perspective of exports: Although there are still bids overseas, the impact of urea export policies on the domestic market is not significant.

Looking at the future: In early March, the urea market in Shandong may experience a slight fluctuation and rise. Business Society urea analysts believe that the upstream market for urea has significantly increased, and the cost support for urea has increased. Downstream industrial demand is the main focus, while agricultural demand is gradually starting. In the future, urea may experience a narrow range of fluctuations and mainly rise.