Recently, due to the superposition of planned maintenance, postponement of resumption of production and fault shutdown, the daily output of urea has gradually declined. On May 15, urea production fell to 172,000 tonnes per day, the lowest since Jan. 31, 2024, but it was higher than the average of 160,000 tonnes per day in January, mainly due to more stoppages at gas head urea plants in January. The peak season of domestic high-nitrogen fertilizer production is mostly from April to May, and June to July is the domestic agricultural topdressing season. At present, it is the production season of domestic high-nitrogen fertilizer, and the price of urea continues to run at a high level, which also stimulates the early start of regional agricultural topdressing and fertilizer preparation, and the superposition of industrial and agricultural demand continues to support the urea market, coupled with the fact that the main contract of 09 urea has continued to fluctuate at 2068~2189 yuan/ton since May, the daily output of urea plant has continued to decline, and the price of urea has been refreshed. Anyunsi data shows that on May 15, the mainstream ex-factory price of urea in China was 2230~2380 yuan/ton, the price in Inner Mongolia and Xinjiang was slightly lower, and the price of most urea manufacturers has refreshed the highest price of urea in 2024.
Looking ahead, how does the urea market work?
First of all, look at the demand for compound fertilizer. According to Anyunsi data, the national compound fertilizer operating rate was about 50.03% last week (the week of May 9), an increase of 1.58% compared with the previous week, and about 8.43% higher than the same period last year; This week, the operating rate of compound fertilizer increased to 50.43%, an increase of 0.31% compared with last week, and about 6.9% higher than the same period last year. According to the time node and compound fertilizer market research in previous years, the operating rate of compound fertilizer will show a downward trend at the end of next week (late May). The decline in the operating rate of compound fertilizer will also affect the procurement demand for urea. The trend of compound fertilizer operating rate is shown in the figure below.
Second, look at agricultural demand. From May to July, it is the summer fertilizer preparation period and top dressing period. Northeast China: mid-June to early July is the topdressing period for maize and rice; North China: May to June is summer fertilizer, and the summer corn topdressing time is about mid to early July to the end of July; Southwest China: top dressing of corn and rice from the end of May to early July in Sichuan, top dressing of rice and corn from June to July in Guizhou and Yunnan, and top dressing of rice in Chongqing from mid to late May; Northwest China: April to May is the spring bottom fertilizer period, late June to mid-July is the top dressing period for corn; Central China: The fertilizer application time for early and middle rice is from April to June; South China: Top dressing for rice in Guangdong from March to April, fertilizer for sugarcane in Guangxi from April to May. At present, it is the agricultural fertilizer period and fertilizer preparation period in some areas, and agricultural demand will bring phased support to the market. On the supply side, there is limited room for the daily production of urea to decline. At present, some of the maintenance devices will resume production after May 16, and from late May to June, the planned maintenance of the devices are Fengxi, Lu'an, Union and Xinjiang Yihua. It is expected that in mid-to-late May, the daily output of urea will rebound slightly, and is expected to be around 175,000 tons.
In the short term, it is expected that the urea market will fluctuate at a high level. Compound fertilizer demand and agricultural demand will still support the market, and urea factories have pre-received orders to be sent for the time being, and factories are still willing to raise prices, but the later daily output rebound, compound fertilizer demand is expected to weaken and fear of heights will also inhibit price increases, and the pressure on policy in the face of urea futures will also directly affect the urea market mentality, and it is expected that the urea market transaction atmosphere will gradually cool down in late May. (Data source: Annvis)
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Please indicate in the following format for reprinting: Source: Agricultural Resources Herald Author: Jin Xiuxiu Editor: Chen Ran Review: Wang Meihong Producer: Zheng Hongyan