Recent price trends of urea

According to the Commodity Analysis System of Business Society, the domestic urea market price has slightly increased this week, with urea prices rising from 2318.75 yuan/ton at the beginning of the week to 2378.75 yuan/ton at the end of the week, an increase of 2.59%. Weekend prices fell 9.83% year-on-year. On July 16th, the urea commodity index was 110.64, unchanged from yesterday, a decrease of 27.37% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 98.99% 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, good downstream demand, and sufficient urea supply

From the supply side perspective, the mainstream price of urea in China has slightly increased 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 4066.00 yuan/ton at the beginning of the week to 3920.00 yuan/ton at the weekend, a decrease of 3.59%, and the weekend price has decreased by 32.39% year-on-year; The price of Anthracite was adjusted at a low level. This week, the price of Anthracite (washing block) in Yangquan was 920 yuan/ton; The price of liquid ammonia slightly decreased, dropping from 2900.00 yuan/ton at the beginning of the week to 2866.67 yuan/ton at the weekend, a decrease of 1.15%. The weekend price fell by 28.75% year-on-year. The upstream raw material prices have slightly decreased, which lacks support for urea prices. The downstream melamine price of urea has slightly increased this week, rising from 6575.00 yuan/ton at the beginning of the week to 6675.00 yuan/ton at the weekend, an increase of 1.52%.

From a demand perspective: agricultural demand has increased, while industrial demand is average. The peak season for fertilizer use in summer has begun, leading to an increase in agricultural demand. The operating rate of the compound fertilizer plant is average, and the enthusiasm for urea procurement is normal. Board and melamine enterprises generally start construction and mainly purchase on demand. From a supply perspective, the daily production of urea is around 160000-170000 tons, indicating sufficient supply.

Small fluctuations and gains in the future market

In late July, the domestic urea market may experience a slight fluctuation and increase. Business Society urea analysts believe that the upstream market of urea has slightly declined, and the cost support for urea is average. The downstream agricultural peak season begins, with good agricultural demand and average industrial demand. The daily production of urea is around 160000-170000 tons, with sufficient supply. In the future, urea may fluctuate and rise in a narrow range.