Urea prices are under pressure after a weak rebound

　　After the domestic urea price hit a new high last year in May, the price started to rise again in mid-June, but the market did not buy it
.

　　Xu Xiaoyun, an analyst at Jinlianchuang Chemical Fertilizer, said that taking Shandong as an example, the price of urea in Shandong has been on a high and volatile upward trend since the beginning of the year in 2022, especially in March, followed by the period from mid-April to early May.
, the price is in a continuous upward pattern
.
However, since mid-June, the price of urea has fallen for about 10 days, with a cumulative decline of more than 200 yuan/ton
.
The decline is more obvious this time, and the downstream also expressed concern about it
.

　　From the perspective of cost, coal prices are controlled by the state this year, and prices continue to operate within a reasonable range
.
Although there is a certain period of increase in the first half of the year, the price of urea is also in an upward trend, which has little impact on the profit of coal head enterprises.
Moreover, the price of urea has been rising all the way, and the company continues to be in a high profit space.
The current profit of coal head enterprises is maintained at about 400~ Between 500 yuan / ton
.
In terms of gas, although the international natural gas price has risen, the state has subsidized enterprises, so the impact on the cost side is weak
.
Therefore, in the process of continuous price rise, the gas head and coal head enterprises were not affected by the cost pressure, and the overall income of the enterprise was quite large
.

　　From the demand side, agricultural demand has been in a stagnant period recently, the wheat harvest has just ended, and there is still some time before corn topdressing
.
The decline in prices has reduced the enthusiasm of downstream dealers to prepare fertilizer, and the bearish sentiment is relatively strong
.

　　From the perspective of futures, the price of futures has fallen recently, and the emotional side affects the spot side, driving the downstream mentality to be bearish
.
And the current basis is fluctuating in the range of 300~400 yuan / ton, which is still higher than the reasonable range
.
Therefore, from the disk analysis, the spot price still has room for downward pressure
.

　　From the perspective of inventory, the spot inventory of domestic enterprises is at a low level as a whole this year
.
Judging from the situation of enterprises including statistics, most enterprises are in the state of Nissan and daily sales, and even some of them mainly issue pre-orders and do not accept orders for the time being
.
Only a few regions have large inventories, but they are not mainstream regions
.
Inventories did not put much pressure on prices
.
However, as labor demand gradually weakened, some companies' inventories began to rise this week
.

　　Xu Xiaoyun said, in summary, in the case of large profit margins, slow demand follow-up, and large future basis, the continuous decline of urea prices has caused downstream mentality to worry about the future price
.
In the second half of the year, the overall domestic demand for urea was less than expected in the first half of the year, and the enthusiasm for preparing fertilizer dropped significantly
.
The overall inventory of enterprises is at a low level, or there may be momentum for prices to rebound again
.
However, the vacancy in demand has not yet been filled, the bearish atmosphere in the downstream is still strong, and the price support is weak in the short term
.
In addition, judging from the company's equipment maintenance situation, there are not many maintenance companies in the short term, and the impact on the average daily output is limited, and the daily output will remain fluctuating around 170,000 tons
.
Therefore, it is expected that in the short term, the price of urea will be under pressure and the probability of downward pressure will be high
.
(Reporter He Xiaoxi)

From: International Business Daily