A Brief Analysis of the Domestic Urea Market Situation for the Week

Price and Market Trends The domestic urea market is generally experiencing a downward trend and consolidation. In some regions, agricultural demand has slightly picked up, leading to increased purchases of downstream products such as board materials and compound fertilizers. Under the national policy aimed at ensuring fertilizer supply and stabilizing prices, coupled with inventory pressures faced by enterprises, futures prices continue to decline, while spot prices are struggling to rise. In the short term, the urea market is expected to remain stable with moderate fluctuations. As of now, ex-factory quotes in Shandong for small and medium-sized granules range from 2,610 to 2,660 yuan per ton; in Henan, ex-factory quotes for small granules are between 2,590 and 2,630 yuan per ton; and in Hebei, ex-factory quotes for small granules are between 2,630 and 2,650 yuan per ton.

Enterprise Production, Sales, and Inventory Management Surface: According to the survey data, this week’s production of small-granule urea totaled 806,200 tons, up 3.10% from the previous week; large-granule urea production reached 185,900 tons, down 1.92% from the previous week. Small-granule urea sales amounted to 795,500 tons, up 8.17% from the previous week; large-granule urea sales totaled 206,900 tons, down 5.22% from the previous week. The sales-to-production ratio for small-granule urea was 98.68%, an increase of 4.63 percentage points from the previous week; the sales-to-production ratio for large-granule urea was 111.28%, a decrease of 3.88 percentage points from the previous week. Total inventory stood at 5.79 million tons, down 5.84% from the previous week.

Regarding enterprise operating rates According to a survey conducted on March 1, 2022, the nation's daily urea production stood at approximately 153,600 tons, with an operating rate of about 70.01%. Among these, urea enterprises using coal as a feedstock had an operating rate of 68.82%, while those using natural gas and coke oven gas as feedstocks had an operating rate of 73.27%. Compared with the previous week, the national urea enterprise operating rate rose by 1.93 percentage points but fell by 5.14 percentage points year-on-year. Specifically, the operating rate of coal-based enterprises increased by 0.95 percentage points from the previous week but declined by 10.15 percentage points year-on-year; meanwhile, the operating rate of gas-based enterprises rose by 4.63 percentage points from the previous week and increased by 8.25 percentage points year-on-year.

Regarding raw materials Domestic coal prices have slightly declined. Production at mainstream coal mines remains stable, with a slight increase in supply. On the basis of ensuring coal supplies for power generation, the supply and demand for coal used in chemical industries have remained relatively stable, leading to a modest drop in prices. Currently, the average ex-factory price of anthracite coal stands at 1,819 yuan per ton, down 4.21% month-on-month but up 53.50% year-on-year, and 8.22% lower than the same period last month. The average ex-factory price of gasification bituminous coal is 1,188 yuan per ton, down 2.14% month-on-month but up 50.38% year-on-year, and 4.12% lower than the same period last month. It is expected that the coal market will continue to experience volatile fluctuations in the short term.

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Weekly Analysis of Domestic Urea Enterprises

According to a survey conducted on March 1, 2022, the nation's daily urea production reached 153,600 tons, up 2.83% from the same period last week but down 5.69% year-on-year. Among these, coal-based enterprises produced 110,700 tons per day, an increase of 1.39% from the same period last week but a decrease of 10.97% year-on-year; gas-based enterprises produced 42,900 tons per day, up 6.75% from the same period last week and up 11.36% year-on-year.

One Analysis of Sales Performance of Domestic Urea Enterprises in China

Inventory: Based on the statistical data indicating that the production capacity of key enterprises accounts for 94.61% of the national total, the nationwide inventory stands at approximately 612,000 tons, a decrease of 37,900 tons from the previous month. Compared to the urea producer inventory of 555,900 tons reported by the association for the same period last year, this represents an increase of 56,000 tons.

International Urea Market Dynamics

Egypt and Nora rose, traders. The addition of new positions and the establishment of fresh positions have driven Egyptian prices up by $140 per ton, to $730 per ton FOB, while U.S. prices have risen by nearly $200 per ton, to $770 per ton CFR.

East of Suez, the market is active, but price increases have been relatively modest. The spot price for urea in the Middle East stands at $554 per ton FOB, while Indonesia’s Kaltim has sold approximately 90,000 tons of granular urea at a price of $553 per ton FOB.