Recent price trends of urea

According to the Commodity Analysis System of Business Society, the domestic urea market price fluctuated and fell this week, with urea prices dropping from 2622.86 yuan/ton at the beginning of the week to 2591.43 yuan/ton at the end of the week, a decrease of 1.20%. Weekend prices increased by 6.82% year-on-year. On August 6th, the urea commodity index was 120.53, unchanged from yesterday, a decrease of 20.88% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 116.78% from the lowest point of 55.60 points on August 17th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)

Insufficient cost support, weakened downstream demand, and sufficient urea supply

From the supply side perspective, the mainstream prices of urea in China have fluctuated this week.

From the data of the upstream and downstream industry chains, it can be seen that the urea upstream market has slightly declined this week. The price of liquefied natural gas has slightly decreased, from 3678.00 yuan/ton at the beginning of the week to 3630.00 yuan/ton at the weekend, a decrease of 1.31%. The weekend price has decreased by 43.86% year-on-year; The price of anthracite has stabilized at a low level, with the price of Yangquan anthracite (washing medium block) at 1130 yuan/ton this week; The price of liquid ammonia fluctuated and fell, dropping from 3500.00 yuan/ton at the beginning of the week to 3483.33 yuan/ton at the weekend, a decrease of 0.48%. The weekend price fell by 9.68% year-on-year. The upstream raw material prices have slightly decreased, which lacks support for urea prices. This week, the downstream melamine price of urea has stabilized at a low level, with a price of 6875.00 yuan/ton.

From a demand perspective: Agricultural demand has weakened, while industrial demand is average. The use of fertilizers in summer has basically ended, with sporadic fertilizer supplementation being the main focus, and agricultural demand has weakened. The operating rate of the compound fertilizer plant is average, and the enthusiasm for urea procurement is normal. Board and melamine enterprises are operating at a low level, with a focus on purchasing on demand. From a supply perspective, the daily production of urea is around 160000-170000 tons, indicating sufficient supply.

Small fluctuation and decline in the future market

In mid to late July, the domestic urea market may experience a slight fluctuation and decline. Business Society urea analysts believe that the upstream market of urea has slightly declined, and the cost support for urea is insufficient. Downstream agricultural demand has basically ended, while industrial demand is average. The daily production of urea is around 160000-170000 tons, with sufficient supply. In the future, urea may experience a narrow range of fluctuations and decline.