Insufficient Cost Support, Urea Prices Fall

Time: Mar 25, 2024

Due to insufficient cost support, urea price in Shandong fell slightly this week. This week, the price of urea in Shandong fell from 2516.67 yuan/ton at the beginning of the week to 2513.33 yuan/ton at the weekend, a decrease of 0.13%. The weekend price fell 10.58% year-on-year.

 urea market price

From the supply side:

At present, the operating rate of urea enterprises is around 80%, and the domestic daily output of urea is about 180,000 tons. During the week, the ex-factory price of mainstream urea manufacturers in Shandong fell slightly, basically falling by 10 yuan/ton.

Judging from the upstream situation:

The upstream market for urea fell slightly this week: the domestic LNG market first fell and then rose this week. Overall, the price of upstream raw materials fell slightly, which provided insufficient support for urea prices.

From the perspective of downstream demand:

Agricultural demand is gradually starting, and industrial demand follows the market. Compound fertilizer, sheet metal, and melamine companies have started operations at low levels, and there is insufficient trading information in the industry, with procurement mainly for rigid needs. The price of melamine downstream of urea fell slightly this week, with the price falling to 7,375 yuan/ton at the weekend, a decrease of 1.67%.

 melamine marekt price

In late March, the urea market in Shandong may fluctuate slightly and rise. Huafu Chemicals Taike believes that the upstream market for urea has fallen slightly and the cost of urea is insufficient to support it. Downstream agricultural demand is gradually starting to emerge, with industrial rigid demand being the main focus. Urea may rise within a narrow range in the market outlook.

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