After a decline of about 10 days on April 12, urea rose again after a decline of about 70-100 yuan/ton, which exceeded the expectations of most industry insiders. Especially, a factory in northern Jiangsu increased by 80 yuan/ton in just four days from 12 to 15. Is there any feeling similar to the last ten days in late March? Do you feel that all factors in the market are not enough to pull up?
How will the urea market end when it lags behind and rises again?
First of all, the plan can’t catch up with the change, and the market has a little variable again. The price reduction started on April 2. The urea manufacturers’surface quotation did not drop much. The actual turnover fell very fast. Some large agricultural companies were a little panicked. They still had some high-priced goods not in place. What’s more, let’s talk about selling them? Therefore, the symbolic receipt of some new orders while lowering prices has brought new support to urea manufacturers’prices. However, when the high-priced goods in the hands of large agricultural companies are digested, they may no longer take new orders and delay for a month and a half, which should bring new low prices to urea manufacturers.
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Secondly, there is still support for industrial demand. The starting rate of compound fertilizer enterprises has risen rapidly. On the one hand, through the increase of urea price in more than a month, especially in Nabor in late March, the compound fertilizer enterprises have increased their sales promotion or continued to sell at a low price. The stock of finished products in their hands has been digested a little faster. In the last wave of spring market, the more production points are a little bit, the more sales points are a little bit, win-win with urea manufacturers, and give urea manufacturers this. The second price increase brought necessary conditions. However, fertilizer production in spring is the end after all. Fertilizer production in summer is a little early. Industrial compound fertilizer enterprises, power plants and plywood factories temporarily digest the previous products and raw materials. Compound fertilizer enterprises should not blindly accept high-price urea. Moreover, some compound fertilizer enterprises will soon convert to high-phosphorus and high-potassium fertilizer, and will not blindly support urea price increase.
Thirdly, there are slightly optimistic expectations in terms of exports and imports. International urea prices have risen for two weeks in succession, although the increase is not significant, but it gives some confidence to Chinese urea manufacturers. Industry insiders also realize that the impact of imported urea is not significant. The imported Iranian urea that arrived at Zhenjiang Port on April 9 is still not much news. The panic of small and medium-sized distributors, or the psychology of early selling, is not so strong. The next importers of urea arrived in Hong Kong in May or even June, so there is no need to pay attention to it for the time being. India won only 372,000 tons of urea in the tender on April 3. New tender may be held at the end of April and May. At that time, the international urea price or another step may bring some opportunities for China’s urea export. Even if it cannot be exported, it can avoid the excessive amount of imported urea flowing into China’s market.
Finally, the psychological tug-of-war between buyers and sellers is temporarily dominated by sellers, or the one with sufficient funds. Although the urea start-up rate is high, it does not affect the market quickly. Although the urea manufacturers’price is 200-300 yuan/ton higher than the cost line, it also fails to prevent speculation among some professionals. This price increase is nothing more than once again confusing everyone’s vision, building up everyone’s psychological bottom price, so that a small number of people in need once again bear high prices.
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In short, the positive factors are too difficult to find, the price increase is very delicate!
To sum up, we should continue to adhere to the original point of view. Without the intervention of policy or unexpected factors, the ex-factory price of urea is still reasonable at the price of 1800-1900 yuan/ton, and it will climb another 100-200 yuan/ton during the peak period of summer market. Ten thousand steps back, if prices continue to rise for a period of time, it will be too late to take urea for the end fertilizer demand in June, let alone for the more concentrated demand for urea in topdressing is still early. Recently, we need to observe the trend of urea prices more before making purchasing decisions. A good result can be achieved only when the purchase is made in good time.
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