Recent price trends of urea

According to the Commodity Analysis System of the Business Society, the domestic urea market price slightly decreased this week, with urea prices dropping from 2551.67 yuan/ton at the beginning of the week to 2526.67 yuan/ton at the end of the week, an increase of 0.98%. Weekend prices fell by 0.13% year-on-year. On October 15th, 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 17th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the 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 decreased this week.

From the data of the upstream and downstream industry chains, it can be seen that the urea upstream market has slightly increased this week: the price of liquefied natural gas has significantly increased, from 4316.00 yuan/ton at the beginning of the week to 4608.00 yuan/ton at the weekend, an increase of 6.77%, and the weekend price has decreased by 27.66% 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 dropped significantly, from 3750.00 yuan/ton at the beginning of the week to 3523.33 yuan/ton at the weekend, a decrease of 6.04%, and the weekend price has decreased by 16.24% year-on-year. Upstream raw material prices fluctuate, providing general 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 fluctuation and decline in the future market

In late October, the domestic urea market may experience a slight fluctuation and decline. Business Society urea analysts believe that the upstream market of urea has ups and downs, and the cost of urea is generally supported. Downstream agricultural demand has basically ended, while industrial demand is average. The daily production of urea is around 160000-170000 tons, with supply exceeding demand. In the future, urea may experience a narrow range of fluctuations and decline.