The urea market is likely to continue to decline

Since mid-August, the average price of Shandong urea market has bottomed out at 2,250 yuan (ton price, the same below) to 2,555 yuan in mid-September, and the price has entered a narrow downward channel
.
As of the end of last week, the average price of small particle urea in Shandong was around 2380 yuan, only about
130 yuan higher than the year's low.

From the perspective of supply, the recent daily output of domestic urea enterprises is 142,000~151,000 tons
.
Affected by the maintenance and short stop of some equipment in Henan, Anhui, Jiangsu and other places, the daily output showed a narrow fluctuation
.
In Shanxi, due to environmental impacts, the reduction is still continuing
.
With the resumption of production of some units in the early stage, the daily output of urea may rise in a narrow range in the future, but some enterprises still have maintenance plans, and it is expected that the daily output of urea will still be in a narrow range in the
later stage.

From the perspective of demand, most areas in the north have entered the autumn fertilizer sweeping stage, and the willingness of downstream traders to replenish stocks is not obvious
for the time being.
In terms of industrial demand, from the perspective of compound fertilizer, the average operating rate of major domestic compound fertilizer enterprises has shown a downward trend
recently.
As of the end of last week, the weekly average operating rate of major domestic compound fertilizer enterprises was 30.
99%, and the weekly reduction was 2.
32%.

In real estate, sales in September increased by 10% month-on-month, but still maintained a year-on-year decline of
25.
7%.
It can be inferred from this that the production situation of downstream rubber board factories is not optimistic, and the increase in demand for urea is limited
.

From the perspective of inventory, with the end of the autumn fertilizer preparation period in the mainstream region, the downstream new procurement volume has gradually decreased, only sporadic procurement, the new order acquisition situation is not good, and the inventory of enterprises has begun to come under pressure to the upside
.
Although a wave of replenishment operations began in early October in the off-season fertilizer preparation in the northeast region, as the follow-up prices continued to weaken, the purchasing sentiment gradually weakened, and it is mainly
wait-and-see at present.
In addition to the planned maintenance of some enterprises in the near future, some enterprises have reduced the amount of operations, which is not ruled out to relieve their own inventory pressure
.

Xu Xiaoyun, a fertilizer analyst at Jinlianchuang, analyzed that although raw coal has a certain support for urea prices, downstream procurement is weak, and most traders have certain reserves, so they are more cautious
about replenishing positions for the time being.
In addition, the current thin storage operation has not yet started, and enterprises will still face continuous upward pressure
on inventory.
There are only a few companies planning to overhaul in the near future, and there is still no major change in the supply side, it is expected that the price of urea in the future market will continue to fall
.