Five factors affect the post-holiday urea market

On the eve of the Spring Festival, due to the effects of rain and snow, urea was not shipped smoothly, and coal supply was tight. Many companies stopped due to power shortages or insufficient supply of raw materials. Coupled with the large export volume at the end of last year, the inventory of various companies is not large, and there is basically no inventory. Therefore, the domestic urea price is relatively stable, and the domestic manufacturers' quotation is the national maximum price limit of 1,725 ​​yuan/ton. However, after the Spring Festival, the five factors may push the price of the domestic urea market upward.

The first is the pull of international market prices. In the international market, the prices of raw materials for crude oil, natural gas and other fertilizers will remain at a relatively high price level. The cost of urea production will remain high. At the same time, international ocean freight charges will continue to rise, which will also increase the pressure on urea prices in the international market. The second is the increase in the cost of urea production. Fertilizer companies lack the necessary energy and raw material resources for production, and coal, electricity, gas and other energy sources have great price pressures. Third, the cost of product transportation increased. The decline in railway and highway transportation capacity caused by snow and ice before the Spring Festival will directly lead to rising transportation costs. Fourth, production enterprises cut production by half. In the later part of January, due to factors such as wagon and weather, it was difficult for manufacturers to ship. Many enterprises in Hunan, Hubei, and Guizhou had already cut production and stopped production, and market resources were reduced. Fifth, the role of exports is highlighted. The urea price is upside down at home and abroad, and the prospects for the urea export market are promising, so that fertilizer producers and distributors have high enthusiasm for exports. Taking the Indian market as an example, due to high urea prices in the Middle East and Russia, China's urea prices are very competitive in the Indian market, and the Indian market has become China's major export market for nitrogen fertilizers this year. The pull of urea exports further exacerbated the shortage of domestic market and promoted the steady rise of urea prices.

In general, the Spring Festival travel season around the Spring Festival, the manufacturers of the shipment will not be too large, coupled with the downstream dealers reserve is not much, the market has a gap, so the price is unlikely to decline; but due to the state to the fertilizer companies to adopt the limit The price policy, urea production companies will also be cautious on the upward adjustment of prices. Of course, it does not rule out that individual companies take illegal actions in private to raise prices in disguise. After all, the country's limit on urea is not the first time. Therefore, the urea market will continue to be mainly stable in the near future.

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