Recent trends in urea prices

This week, the domestic urea market is poised to rise and slow down. At the beginning of the week, the urea market was affected by bearish news from India, with exports being suppressed and the urea market falling. But after mid week, the market returned to fundamentals, and urea production remained generally low. With the support of factory orders, urea prices slightly surged, but still did not break through the previous decline. According to the Commodity Analysis System of Business Society, the price of urea in Shandong dropped from 2444 yuan/ton at the beginning of the week to 2434 yuan/ton at the end of the week, a decrease of 0.41%.

From the supply side, the current operating rate of urea enterprises is around 80%, and the daily production of urea in China is about 180000 tons, with little change in supply compared to the previous period. Within the week, the factory prices of mainstream urea manufacturers in Shandong rebounded after falling, and the overall change was not significant, with the fluctuation controlled at around 20 yuan/ton.

From the upstream market perspective:

Liquefied natural gas: As of April 28th, the average price of liquefied natural gas in China was 4104 yuan/ton, an increase of 1.33% compared to the average price of 4050 yuan/ton on April 22nd. Traffic has resumed smoothly, and market trading has increased. The combined decrease in import volume, the decline in US exports, and the shutdown of some Russian facilities. Under tight supply conditions, low liquid prices are pushing upwards.

Coal: Coal has been operating weakly this week, while thermal coal has maintained normal production and sales overall, and the market has been operating weakly overall. Still focusing on implementing long-term cooperative shipping. Some coal mines have completed their production tasks this month, and the overall coal supply level has slightly decreased. Traders tend to maintain a cautious wait-and-see attitude due to their average willingness to ship due to their uncertainty about the future market.

Liquid ammonia: This week, liquid ammonia in Shandong region rose. According to the Commodity Analysis System of Business Society, the weekly increase in liquid ammonia was 3.8%, mainly due to a significant decline in the previous period. Manufacturers showed a clear attitude of price support this week, and prices slightly rebounded. During the week, prices of a large factory in Shandong generally fell and rebounded, with an increase of over 100 yuan/ton. The supply and demand fundamentals remain stable. Although the peak season for agricultural procurement is approaching, factory orders remain high, and industrial demand remains in high demand. At present, the mainstream quotation in Shandong region is between 2850-3000 yuan/ton.

From the perspective of downstream demand: agricultural demand has weakened, while industrial demand is average. Spring plowing is gradually coming to an end, with sporadic fertilization as the main focus. Composite fertilizer, board, and melamine enterprises have started production at a low level, and the industry lacks confidence in trading and investment, with a focus on essential procurement. This week, the downstream price of melamine in urea is still hovering at the bottom, and the price remains unchanged from last week. There has been no improvement in the price this week.

Looking at the future: Business Society urea analysts believe that in early May, it is expected that the urea market in Shandong will maintain a narrow adjustment pattern. Although upstream raw material support for urea is strong, downstream agricultural demand may slow down with seasonal weakening, and industrial rigid demand will be the main focus. Especially, exports may be affected by insufficient Indian procurement, and prices may loosen.