Recent trends in urea prices

According to the Commodity Analysis System of Business Society, the urea market price in Shandong Province slightly increased this week. The urea price increased from 2485 yuan/ton at the beginning of the week to 2508.33 yuan/ton at the weekend, an increase of 0.94%, and the weekend price decreased by 8.19% year-on-year. On January 7th, the urea commodity index was 116.67, unchanged from yesterday, a decrease of 23.41% from the highest point in the cycle of 152.33 points (2022-05-15), and an increase of 109.84% 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 Shandong 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 fluctuated and fallen this week. The price of liquefied natural gas has fluctuated and fallen, from 5510 yuan/ton at the beginning of the week to 5500 yuan/ton at the end of the week, a decrease of 0.18%, and the weekend price has dropped by 14.57% year-on-year. The price of anthracite coal has stabilized at a low level, with the price of Yangquan anthracite coal (washing medium block) at 960 yuan/ton this weekend; The price of liquid ammonia fluctuated and increased, rising from 3623.33 yuan/ton at the beginning of the week to 3640 yuan/ton at the end of the week, an increase of 0.46%. The weekend price fell by 20.98% year-on-year. 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 has stabilized at a high level, with a price of 7475 yuan/ton. 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 January, the urea market in Shandong 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.