Recent price trends of urea

According to the Commodity Analysis System of the Business Society, the domestic urea market prices fell first and then rose this week. Urea prices first fell from 2556.67 yuan/ton on October 30th to 2515.00 yuan/ton on October 31st, a decrease of 1.63%, and then rose to 2545.00 yuan/ton on November 5th, an increase of 1.19%. Over the weekend, prices increased by 1.56% year-on-year. Overall, urea prices fell by 0.46% this week. On November 6th, the urea commodity index was 119.15, an increase of 0.78 points compared to yesterday, a decrease of 21.78% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 114.30% 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, 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 increased first and then decreased. The price has increased from 4958.00 yuan/ton on October 30 to 5270.00 yuan/ton on October 31, an increase of 6.29%, and then dropped to 4926.00 yuan/ton at the end of the month, a decrease of 6.53%. Over the weekend, the price has decreased by 3.60% year-on-year. Overall, the price of liquefied natural gas fell by 0.65% this week; The price of anthracite has slightly decreased, with the price of Yangquan anthracite (washing medium block) dropping from 1290 yuan/ton at the beginning of the week to 1190 yuan/ton at the end of the week, a decrease of 100 yuan/ton; The price of liquid ammonia slightly decreased, dropping from 3966.67 yuan/ton at the beginning of the week to 3933.33 yuan/ton at the weekend, a decrease of 0.84%, and the weekend price decreased by 5.98% year-on-year. The upstream raw material prices have slightly decreased, which lacks support for urea prices.

From a demand perspective, agricultural demand has weakened, industrial demand has increased, and urea exports are relatively good. 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. The downstream melamine price of urea has slightly increased this week, rising from 7175.00 yuan/ton at the beginning of the week to 7375.00 yuan/ton at the weekend, an increase of 2.79%. 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 mid November, the domestic urea market may fluctuate slightly and rise. Business Society urea analysts believe that although the upstream market of urea has slightly declined, the cost support for urea is insufficient. But downstream industrial demand has improved, winter storage is about to begin, and agricultural demand has increased. 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.