August urea market is still positive support

Second tender limited impact on the domestic market

In late July, the domestic fertilizer into the off-season, the price of urea as a whole showed down trend. Liu Wei Chang Rising Group Co. sales manager, said urea prices fell mainly influenced by the end of the summer, the domestic fertilizer, although India's second round of bidding prices lower than market expectations, but the impact on the market is not large.

Liu Wei Chang told reporters: "At present, the mainstream ex-factory price of urea in the Shandong region to maintain 1470 yuan / ton, the price of the outgoing 1450 yuan / ton, while prices eased from the previous month, but the overall trend is still showing stable operation of India's second round. tender prices are lower than market expectations, $ 260 / ton FOB equivalent to the ex-factory price is only 1410-1420 yuan / ton, which is the main domestic enterprises unacceptable. Therefore, the current state of mind rather cut domestic enterprises is also do not rush to set in Hong Kong. "

Henan Yan Jin Kai Group Limited assistant general manager of the same chemical Yang Yu also said that after the second tender in India, domestic urea prices to fall, which is mainly influenced by domestic agricultural fertilizer ends. "At present, Henan Province mainstream prices for 1450 yuan / ton, almost stagnant agricultural sales market, some manufacturers have adopted measures to protect the bottom, but sales still not ideal. Though India second tender prices have limited impact on the domestic market, but also provide the market reference. "

Outlook operating rates or drop

July urea market finished lower trend, although showing, but compared to May of 1350 yuan / ton low is already higher than the market expected, after all, in the context of oversupply, the price on the market is a kind of demanding. Liu Wei-chang said that overall, July urea market showed signs of improvement, although the price to fall, but the decline was limited. "In 1450 yuan / ton prices, there are still 80% of enterprises running at a loss, which is the main reason companies are reluctant to set in Hong Kong. Fertilizer with lower domestic demand, industry capacity utilization is expected in August of urea will will go down. "

Low operating rate determines the supply of the market, thus affecting the price trend. According to the experience of previous years, in general, May is a traditional overhaul of the enterprise, but because of this year's urea prices have fallen below the cost line, in May, the domestic part of the urea business after a brief overhaul has resumed production. Overall, the operating rate is still around the downward trend. Liu Wei Chang said that at present, the gas-based urea enterprises operating rate remained low, in August there will be some companies shutdowns, and some coal companies after the first pre-production also have a maintenance plan in August, so in August, although the market in the off-season, but the supply does not appear excessive.

Liu Wei Chang stressed that although the urea industry as a whole presents a state of oversupply, but the current market situation, supply and demand should be in balance. "Although the cost of new capacity has certain advantages, but mostly concentrated in Inner Mongolia and Xinjiang, sold in other regions do not necessarily have a cost advantage, even though production costs are relatively low, but if the accounting of the financial costs and transportation costs, currently not will be able to profit, which is the current production capacity utilization rate is not the main reason for the high. "

Society Initiative stable prices again

Will be conducive to the stable operation of the industry

July 25, China Key urea nitrogen Association held a forum in Beijing. For the current plight of nitrogen fertilizer industry, China Nitrogen Fertilizer Industry Association released the "stable summer fertilizer market views."

Nitrogen Association said that at present, China's agriculture has entered the off-season fertilizer, to stabilize the off-season market, to overcome the difficulties faced by requiring urea together, play industry strength, solidarity, hard times. "With good off-season fertilizer plant maintenance, maintenance, reducing nitrogen fertilizer production, maintaining the off-season market stability, to protect the safety of the fall of the normal production and supply of agricultural fertilizer ready; engage in aggressive price vicious competition, maintaining the domestic fertilizer market stability; firmly abide WTO rules, never involved in urea dumping cheap exports, and to mobilize trading partners do not participate in export dumping, and consciously safeguard international image and international fertilizer market order Chinese urea exports. "

Nitrogen Initiative Association has also been a positive response from the mainstream of urea enterprises. Liu Wei Chang said that the current for nitrogen fertilizer industry, is still in a difficult period, industry associations in the critical period, the United Nations twice urea mainstream enterprise market stability maintenance is necessary. "If at this time, domestic enterprises can not work together, compete with each other to lower prices, the consequences would be disastrous."

With the end of the domestic season fertilizer, urea market is not expected pessimistic. Yang Tongyu said that 1450 yuan / ton price, although it is still at a loss to the industry, but considering the current situation of supply exceeding demand, the current price is actually quite reasonable, already helps to speed up the elimination of backward production capacity, so the decline will not be much space .

Liu Wei Chang said that although the August agricultural fertilizer into the off-season, but industrial demand will make the urea price stability maintenance. "The current capacity utilization rate of fertilizer industry is about 20%, the operating rate of the latter compound fertilizer industry will gradually increase, which will help stabilize the urea market." (Chinese agricultural)