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 2520.00 yuan/ton at the beginning of the week to 2526.67 yuan/ton at the end of the week, an increase of 0.26%. Weekend prices fell by 0.82% year-on-year. On October 22, the urea commodity index was 117.52, unchanged from yesterday, a decrease of 22.85% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 111.37% from the lowest point of 55.60 points on August 17, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)

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

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 significantly increased this week: the price of liquefied natural gas has significantly increased, from 4498.00 yuan/ton at the beginning of the week to 4900.00 yuan/ton at the weekend, an increase of 8.94%, and the weekend price has decreased by 22.91% year-on-year; The price of anthracite has stabilized at a high level, with the price of Yangquan anthracite (washing medium block) around 1290 yuan/ton this week; The price of liquid ammonia has increased significantly, from 3566.67 yuan/ton at the beginning of the week to 3800.00 yuan/ton at the weekend, an increase of 6.54%, and the weekend price has decreased by 7.99% year-on-year. The significant increase in upstream raw material prices has increased support for urea prices. The price of melamine downstream of urea has temporarily stabilized this week, at 7175.00 yuan/ton.

From a demand perspective: Agricultural demand has weakened, industrial demand is average, and urea exports are currently not favorable. Agriculture has entered the off-season. The operating rate of compound fertilizer plants has decreased, and the enthusiasm for urea procurement has weakened. Board and melamine enterprises generally start construction and mainly purchase on demand. From a supply perspective, some enterprises have completed maintenance, and daily urea production has further increased, resulting in sufficient supply.

Small fluctuations and gains in the future market

In late October, the domestic urea market may experience a slight fluctuation and increase. Business Society urea analysts believe that the upstream market of urea has significantly increased, and urea cost support has increased. Downstream agricultural demand has basically ended, while industrial demand is average. Indian bidding news has boosted industry sentiment. The daily production of urea is around 160000-170000 tons, with a good supply. In the future, urea may fluctuate and rise in a narrow range.