As we all know, the price of urea in mid-late July was rather poor. The price of urea gradually dropped to 1850-1900 yuan/ton in Shandong Lianghe mainstream factory, and the turnover rate was as low as 1800 yuan/ton. The price of urea in Linyi once dropped to 1850-1860 yuan/ton in the factory. Some manufacturers in Shandong and Hebei Province rose by 1 due to the large number of orders pending for export on 26-28 days. 0-30 yuan/ton also stopped abruptly. The price of Northwest manufacturers dropped by 100 yuan/ton. By July 30, the price of Jiangsu and Anhui lakes manufacturers dropped by 20-30 yuan/ton, which is the end of urea in July.
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However, it is worth noting that by the end of July, urea prices have slowed down, some urea manufacturers have stabilized their prices for more than a week, and Linyi’s urea delivery price has rebounded by 10-30 yuan/ton, which is a large quantity of compound fertilizer enterprises? Or is it due for export? Or will supply be reduced? Is it feasible to go up in August?
August’s rise is feasible, but it is limited to a few small increases, which is difficult to sustain by a large margin.
First, although domestic demand exists, it is not centralized. On the industrial side, at the end of June, the compound fertilizer enterprises began to collect autumn fertilizer. In July, the start-up rate of the compound fertilizer enterprises has slowly rebounded. On the one hand, in order to avoid the greater pressure of environmental protection from September to early October, on the other hand, the demand for autumn fertilizer is just needed after all, and the manufactured products that can be processed properly will certainly try their best to produce in autumn. Fertilizer, after all, is a high phosphorus and potassium fertilizer. In addition, urea price has been on the high side. Compound fertilizer enterprises either use ammonium chloride sulfate to replace urea when purchasing raw materials, or use ammonium chloride sulfate to replace urea slowly, or pull urea price ahead of time. The purchasing of compound fertilizer enterprises is to support a small increase in urea price, and it is difficult to constitute a special case. Great upward momentum. Plywood factories have been facing greater environmental pressure in recent days. Plywood factories in some areas of Shandong Province have been completely shut down and rectified. After the explosion of No. 1 Gasification Plant in Henan Province on July 19, environmental protection pressure in Henan Province is also greater. Of course, with the passage of time, after environmental safety inspection meets the standards, urea purchases in plywood factories will be a little concentrated. The exact time remains to be seen. Power plants can only maintain the same pace of procurement as before, and the impact on urea prices is still small.
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Agricultural sector, starting in late August, from south to north, agricultural distributors will continue to take goods for autumn fertilizer, or consider the impact of environmental pressure on urea start-up, or consider the consumption of exports, a small number of distributors will take goods in August, only to support a small increase in urea prices, will not have too much power.
Second, exports can be expected, but they are limited to quantity rather than price. In recent days, the off-shore guiding price of Urea Export in China has risen to about 280 US dollars per ton. The price of urea export ports in China is also limited to 1800 RMB per ton. A few ports have a slightly higher price of 1850 RMB per ton. According to the usual practice, the factory price of urea factory in China is 50 yuan/ton higher than that of export factory. At present, although the factory with export advantage concentrates on low-price or non-price port, the quantity is large, even causes some ports to be blocked, suspend unloading, and this practice has been realized in price, but the factory price for domestic sale is only one. It’s a listing price, with very few transactions, which are limited to just needed customers.
Export volume can be expected, as can be seen in India, Australia and other places. In January-June, China’s urea exports totaled 1.77 million tons, an increase of about 150% compared with the same period last year. Prices are hopeless. Since the end of the bid-printing on July 8, international urea prices have dropped to around $280/ton. If India issues a new tender on August 10 and after. If the price is lower than the tender price, the price is still bad for China’s urea, which is also regarded as volume; in short, considering India’s domestic stock is sufficient, the quantity is detailed in the membership zone of China Fertilizer Network, whether there will be tender in India is still unknown, even if there is tender, the quantity of goods will not be taken. It will be too big.
Thirdly, China’s urea supply rate is still high. Although prices fell in July and some fell sharply, the prices of most urea manufacturers are still above the cost line at a certain level. Under the pressure of considerable profits and temporary absence of environmental safety inspection, urea start-up rate continues to be high. In recent days, production has risen to around 160,000 tons. Only a few urea manufacturers need to be repaired in August. Even considering the subsequent environmental safety inspections for military parades and so on, the daily output of urea is estimated to be 150,000 tons or even more, which will restrain the possible rise in urea prices in August.
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In short, the price of urea has not fallen sharply, and it will be difficult to rise sharply in the later period. Although there are some good things we can see, they can not be called too much support. Our distributors do not have to wait for low prices, but can operate in an appropriate amount, but they can not blindly optimistic that urea prices will rise all the way since August of the previous two years. The so-called urea rise in August is better than a small consolidation or a small shock of urea prices under the autumn fertilizer demand.