Price trend

According to the commodity analysis system of SunSirs, the price of urea in the domestic urea market fell slightly this week, from 2,613.75 RMB/ton at the beginning of the week to 2,602.50 RMB/ton at the end of the week, down 0.43%. Weekend prices fell 16.53% year-on-year.

On May 7th, the urea commodity index was 121.05 points, unchanged from the previous day, a decrease of 20.53% from the cycle's highest point of 152.33 points (2022-05-15), and an increase of 117.72% 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 abundant urea supply

From the supply side perspective, the mainstream price of urea in China slightly decreased this week. The weekend quotation for urea in San'an, Zhangzhou was 3,000 RMB/ton, which was temporarily stable compared to the beginning of the week; Shandong Ruixing’s urea was quoted at 2,350 RMB/ton over the weekend, a decrease of 20 RMB/ton compared to the beginning of the week; Hualu Hengsheng’s urea was quoted at 2,330 RMB/ton over the weekend, a decrease of 20 RMB/ton compared to the beginning of the week; Jinan Jinhao’s urea was quoted at 2,780 RMB/ton over the weekend, which was temporarily stable compared to the beginning of the week; Dongying Xinwang’s urea was quoted at 2,800 RMB/ton over the weekend, which was temporarily stable compared to the beginning of the week.

From the data of the upstream and downstream industry chains, it can be seen that the urea upstream market had slightly declined this week: the price of liquefied natural gas slightly decreased, from 4,416.00 RMB/ton at the beginning of the week to 4,140.00 RMB/ton at the weekend, a decrease of 6.25%, and the weekend price has decreased by 43.30% year-on-year; the price of anthracite was consolidated at a low level, and the price of anthracite (washing medium block) in Yangquan this weekend was 1,260 RMB/ton, which was temporarily stable compared with the beginning of the week; the price of liquid ammonia was temporarily stable at 3,233.33 RMB/ton, and the weekend price decreased by 36.93% year-on-year. Upstream raw material prices had slightly declined, the support for urea prices weakened. The downstream melamine price of urea slightly decreased this week, dropping from 7,550.00 RMB/ton at the beginning of the week to 7,525.00 RMB/ton at the weekend, a decrease of 0.33%.

From a demand perspective: Agricultural demand was average, while industrial demand was normal. In some southern regions, rice started to prepare and use fertilizers, and agricultural demand was average. The operating rate of the compound fertilizer plant was acceptable, and the enthusiasm for urea procurement was average. The board and melamine enterprises were operating normally, and the purchasing was mainly just in needed. From a supply perspective, the daily production of urea was around 160,000-170,000 tons, indicating sufficient supply.

Market outlook

The domestic urea market may fluctuate and rise slightly in mid to early May. SunSirs urea analysts believe that the upstream of urea slightly declined, and the cost support for urea was general Downstream agricultural demand entered the peak season, and industrial demand was normal. The daily production of urea was around 160,000-170,000 tons, with sufficient supply. In the future, urea may fluctuate and rise in a narrow range.

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