Looking back on March, the urea market price has been rising in succession. The market price of urea has risen from 1850-1900 yuan/ton at the beginning of March to 2050-2100 yuan/ton at present. Domestic urea market is more active, industrial and agricultural demand is more vigorous, urea quotations have increased in varying degrees, manufacturers have more orders, strong willingness to bid, the market is expected to continue to run at a high level in the future.
Strong agricultural demand and high prices
In recent weeks, urea market around the mainstream factory prices continue to break through new highs, the market was not expected to continue to rise, it is shocking. As of this week’s press release, the actual factory price of small particles in traditional urea producing areas in China is 2000-2030 yuan/ton, and that of large particles is 2100 yuan/ton. In less than a month, the price of urea market has risen by 200 yuan/ton. After the Spring Festival last year, urea prices in March were mostly in a downward trend. Why are prices rising all the way this year?
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Wang Zhiqiang, deputy general manager of chemical industry management center of Shanxi Orchid Science and Technology Venture Co., Ltd., thinks that the rising trend of urea market is mainly affected by the strong demand for agriculture. At present, the Northeast market is actively starting up for farming, but the time is delayed. The southern market will also have the demand for rice fertilizer before and after the Qingming Festival. In this way, the demand for fertilizer in Northeast China and the demand for rice fertilizer in South China will be increased. Time just overlaps, the peak season is shorter and more concentrated than previous years, so price increases are larger.
Wang Zhiqiang said that, on the one hand, with the start of spring farming, farmers are actively preparing for farming, purchasing willingness continues to strengthen, the market gradually warmed up. On the other hand, the urea market as a whole has a low starting rate, tight market supply, prices continue to rise, and market turnover is good.
In summary, the current urea market price has stabilized at a high level of 2,000 yuan/ton. Influenced by favorable factors such as downstream market demand and upstream raw material price support, the recent urea market trading atmosphere has improved, and inventory has remained low. The offer continues to rise. With the operation of the downstream purchase-sale mode, some manufacturers still intend to increase, while the short-term price is running at a high level.
Increased industrial demand to support urea market
Compound fertilizers, which had been depressed before, have recently added a spark to the high price of urea. At present, the compound fertilizer market has changed significantly. In mid-March, the purchasing willingness of raw materials in compound fertilizer and mixed fertilizer factories is strong, and the industrial demand supports the urea market price significantly.
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It is understood that the current urea mainstream ex-factory quotation in Shandong Province is 2000-2030 yuan/ton, the agricultural market demand basically sweeps away, the industrial market demand continues to develop, and the downstream purchasing quantity increases. At present, the urea raw materials that have arrived in the downstream compound fertilizer enterprises can be maintained at least until the middle of next month. The quantity is too large, and the downstream acceptance of high-price urea is relatively general. In summary, urea overall price has been rising recently, and some wait-and-see distributors began to purchase again. It is expected that although the late quotation has been raised, the purchasing intention of compound fertilizer plants still needs to be paid attention to.
The bullish mentality of the future market is in the majority
Speaking of the future urea market, Zeng Qingliang believed that the peak season of the compound fertilizer market will continue in the short term, which will still support the urea market, and fertilizer will follow in the summer after this wave of market, urea market will show a stable bullish trend.
Wang Zhiqiang is optimistic about the future urea market. He said that due to the extension of fertilizer use period in the Northeast market to the Qingming Festival, there will be more than 10 days to support the urea market. Influenced by tight supply and concentrated demand, urea market prices are expected to remain high and there is still room for growth.
Generally speaking, the overall starting rate of urea enterprises is less than 60%, industry and agriculture have better demand expectations, and most manufacturers have sufficient orders to be issued, less pressure on shipment, factory price mentality is strong, it is expected that the urea market prices will continue to rise in the short term, continuing a steady upward trend.
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