Recent trends in urea prices

Agricultural demand is gradually starting, and urea prices in Shandong have slightly increased this week. According to the Commodity Analysis System of Business Society, the price of urea in Shandong increased from 2506.67 yuan/ton at the beginning of the week to 2525 yuan/ton over the weekend, an increase of 0.73%, and the weekend price decreased by 9.79% year-on-year.

From the supply side perspective, some gas companies have resumed production and started operating higher. The data shows that the operating rate of domestic coal urea enterprises this week is about 86.1%, while that of gas urea enterprises is about 85.8%. The daily urea production in China is about 190000 tons. The mainstream urea manufacturers in Shandong saw a slight increase in factory prices during the week.

From the upstream market perspective, there were ups and downs in the urea upstream market this week: the price of liquefied natural gas plummeted by 7.02%, and the weekend price fell by 41.35% year-on-year. Affected by rainy and snowy weather in some regions of China, market circulation is restricted, terminal demand is released slowly, and the trading atmosphere is poor. The price of liquid ammonia increased by 4.68%, and the weekend price fell by 37.13% year-on-year. However, the prices of anthracite coal have remained low and have stabilized. Over the weekend, the price of Yangquan anthracite coal (washed lump) was 960 yuan/ton, indicating a continued weak trend in the coal market in the short term. Overall, upstream raw material prices fluctuate, providing moderate support for urea prices.

From the perspective of downstream demand: agricultural demand is gradually starting, and industrial demand is following the market. Composite fertilizer, board, and melamine enterprises are operating at a low level, with a focus on procurement for essential 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 exports: Although there are still bids overseas, the impact of urea export policies on the domestic market is not significant.

In the future, the urea market in Shandong may experience a slight fluctuation and increase in late February. Business Society urea analysts believe that the upstream market of urea has significantly declined, and the cost support for urea is insufficient. But downstream industries are mainly in demand, and agricultural demand is gradually starting. In the future, urea may experience a narrow range of fluctuations and mainly rise.