Recent trends in urea prices

According to the Commodity Analysis System of Business Society, the domestic urea market prices have slightly declined this week, with urea prices dropping from 2601.67 yuan/ton at the beginning of the week to 2568.33 yuan/ton at the end of the week, a decrease of 1.28%, and a year-on-year decrease of 6.40% at the end of the week. On December 10th, the urea commodity index was 119.46, unchanged from yesterday, a decrease of 21.58% from the highest point in the cycle of 152.33 points (2022-05-15), and an increase of 114.86% from the lowest point of 55.60 points on August 17th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to present)

Cost support is average, downstream demand weakens, and urea supply is sufficient

From the supply side perspective, the mainstream price of urea in China has slightly declined 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 dropped significantly, from 5930.00 yuan/ton at the beginning of the week to 5734.00 yuan/ton at the end of the week, a decrease of 3.31%, and a year-on-year decrease of 20.29% over the weekend. The price of smokeless coal has significantly increased, with the price of Yangquan smokeless coal (washing medium block) increasing by 405 yuan/ton to 1505 yuan/ton over the weekend; The price of liquid ammonia has significantly increased, rising from 3813.33 yuan/ton at the beginning of the week to 4056.67 yuan/ton over the weekend, an increase of 6.38%, and a year-on-year decrease of 17.04% over the weekend. Upstream raw material prices fluctuate, providing moderate support for urea prices.

From a demand perspective: Agricultural demand has weakened, while industrial demand is average. Agriculture has entered the off-season. Composite fertilizer, board, and melamine enterprises generally start construction, with a focus on procurement for immediate needs. This week, the downstream price of melamine in urea slightly decreased, dropping from 7300.00 yuan/ton at the beginning of the week to 7250.00 yuan/ton at the end of the week, a decrease of 0.68%. From the perspective of supply, some enterprises have completed maintenance, resulting in a further increase in daily urea production and sufficient supply.

Slight fluctuation and decline in the future market

In mid to late December, the domestic urea market may experience a slight fluctuation and decline. Business Society urea analysts believe that the upstream urea market has ups and downs, and the cost support for urea is average. Downstream industrial demand is average, while agricultural demand is weakening. The daily production of urea is around 180000 tons, with sufficient supply. In the future, urea may experience a narrow range of fluctuations and decline.