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 2398.75 yuan/ton at the beginning of the week to 2296.25 yuan/ton at the end of the week, a decrease of 4.27%. Weekend prices fell by 28.26% year-on-year. On June 4th, the urea commodity index was 106.80, unchanged from yesterday, a decrease of 29.89% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 92.09% 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)

Weak cost support, average 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 3820.00 yuan/ton at the beginning of the week to 3674.00 yuan/ton at the weekend, a decrease of 3.82%, and the weekend price has decreased by 43.07% year-on-year; The price of anthracite has stabilized at a low level, with the price of Yangquan anthracite (washing medium block) at 1160 yuan/ton this weekend; The price of liquid ammonia slightly decreased, dropping from 2966.67 yuan/ton at the beginning of the week to 2950.00 yuan/ton at the weekend, a decrease of 0.56%. The weekend price decreased by 43.88% year-on-year. Upstream raw material prices have slightly declined, weakening support for urea prices. The price of melamine downstream of urea slightly decreased this week, from 7325.00 yuan/ton at the beginning of the week to 7125.00 yuan/ton at the weekend, a decrease of 2.73%.

From a demand perspective: Agricultural demand is average, while industrial demand is normal. In some southern regions, rice has started to prepare and use fertilizers, and agricultural demand is average. The operating rate of the compound fertilizer plant is acceptable, and the enthusiasm for urea procurement is average. The board and melamine enterprises are operating normally, and the main focus is on purchasing just in need. 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

The domestic urea market may fluctuate slightly in mid to late June. Business Society urea analysts believe that the upstream of urea has slightly declined, and the cost support for urea is average. But downstream agricultural demand has increased, and some northern regions have started to prepare and supplement fertilizers, while industrial demand is normal. 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.