Recent price trends of urea

According to the Commodity Analysis System of Business Society, the domestic urea market price has slightly decreased this week, with urea prices dropping from 2313.75 yuan/ton at the beginning of the week to 2210.00 yuan/ton at the end of the week, a decrease of 4.48%. Weekend prices fell by 30.22% year-on-year. On June 18th, the urea commodity index was 102.79, unchanged from yesterday, a decrease of 32.52% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 84.87% 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)

Reduced cost support, insufficient downstream demand, and sufficient urea supply

From the supply side perspective, the mainstream price of urea in China has slightly decreased this week.

From the data of the upstream and downstream industry chains, it can be seen that there have been ups and downs in the urea upstream market this week. The price of liquefied natural gas has slightly increased, rising from 3750.00 yuan/ton at the beginning of the week to 4032.00 yuan/ton at the weekend, an increase of 7.52%, and the weekend price has decreased by 36.62% year-on-year; The price of Anthracite dropped slightly. This weekend, the price of Anthracite (washing block) in Yangquan was 920 yuan/ton, down 140 yuan/ton; The price of liquid ammonia slightly decreased, dropping from 2916.67 yuan/ton at the beginning of the week to 2816.67 yuan/ton at the weekend, a decrease of 3.43%. The weekend price fell by 43.36% year-on-year. Upstream raw material prices fluctuate, and there is insufficient support for urea prices. This week, the downstream price of melamine in urea stabilized at a low level, with a price of 6625.00 yuan/ton.

From a demand perspective: Agricultural demand has weakened, while industrial demand is average. The summer fertilizer season has not yet begun. The production of high nitrogen compound fertilizers has basically ended, and the operating rate of compound fertilizer plants has decreased, weakening the enthusiasm for urea procurement. Board and melamine enterprises generally start construction and mainly purchase on demand. From a supply perspective, some enterprises have started to resume production, with daily urea production ranging from 160000 to 170000 tons.

Small fluctuations and gains in the future market

In late June, the domestic urea market may experience a slight fluctuation and increase. Business Society urea analysts believe that the low level consolidation in the upstream of urea results in average support for urea costs. Starting from the peak season of downstream agriculture, agricultural demand increases while industrial demand is average. 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.