Urea market can hardly improve this spring

When spring plowing occurs, the agricultural market is always in a tepid state. In the face of the weak domestic urea market in the past half-month, although manufacturers are not willing to cut prices, due to the lack of demand, domestic domestic urea prices have once again declined slightly. Judging from the current market situation, this spring, the domestic urea market is likely to be so flat in the past.

In 2012, the domestic new urea production capacity was 6.44 million tons. By the end of December, the urea production capacity reached 71.3 million tons. From the perspective of the availability of fertilizers in the market at the end of February, the market volume of various regional markets was higher than that of the same period of last year. The increase in domestic urea supply capacity, combined with good winter storage conditions, has ensured that the urea market will show a steady trend this spring. However, the soil moisture content was high in some parts of North China, East China and Northeast China, and drought conditions were experienced in some areas in the southwest and northwest, making the domestic urea market appear to be in a weak overall situation since mid-March. At the same time, the continuing and unseen decline in the international urea market has also hit domestic market confidence to a large extent. At present, the mainstream domestic urea factory price 2100 ~ 2200 yuan (t price, the same below).

According to the statistics of the International Fertilizer Industry Association (IFA), in 2012, the global urea production capacity will reach 196 million tons, the consumption of urea for fertilizers will reach 144 million tons, and the consumption of industrial urea will be close to 19.7 million tons. In 2013, the world's new urea production capacity will be 8.5 million tons, and the total production capacity will reach 200 million tons, an increase of 4.4%. This also means that the future supply turmoil in the international urea market will intensify.

Due to the weather, purchases of urea in the United States, northwestern Europe and Thailand were postponed this spring. Meanwhile, due to the recent weak international urea market, international buyers continued to wait and see. In addition, by the end of February, India’s urea stocks had risen to 731,000 tons, almost double the amount of the same period of last year. India’s first public tender for urea this fiscal year will be postponed to April from the end of March.

Last week, Yurii's bulk urea FOB in bulk fell to 380-385 US dollars, the Baltic fell to 370-380 US dollars. In April, some traders will have to make up their positions, while buyers in Latin America will also need to resume purchasing, which, to a certain extent, will stabilize the urea trade price. In spite of this, the international urea market still exceeds demand in April, and by May and June this surplus will be further exacerbated. International urea entered a bear market and it is expected that the market will continue to be bearish.