Will the loose supply of domestic urea gradually ease?

Since this year, due to the outbreak of global public health incidents, China's urea imports and exports have been affected to a certain extent. At present, the spread of public health incidents in countries such as India and Iran is accelerating. Especially as India is the first exporter of urea in China, the blockade period will also be extended to at least the end of April. Market participants said that the recent turmoil in the international crude oil market has driven the price fluctuations of the entire domestic energy sector to expand, and urea fluctuations have also increased, but there are many uncertainties in the crude oil market's guidance on urea prices. At present, the domestic urea market is relatively loose, and this situation is expected to gradually ease with the increase of enterprise maintenance and digestion of exports in the later period.

"Recently, the operating rate of domestic urea companies has decreased slightly to 78.82%, and the daily output has decreased slightly to 161,500 tons. Although the short-term production level and daily output are still at a high level in the same period, some short-term repairs by some large enterprises recently have brought the market There is a breathing opportunity. ”Zhang Linglu, an analyst at China Everbright Futures, believes that in addition to the epidemic prevention factors, another reason for the decline in the start-up level is that the company ’s production profits have been continuously compressed, and the manufacturers’ production power has weakened, thus entering the maintenance state. increase.

From the perspective of inventory, this week's latest enterprise inventory level was 678 thousand tons, a drop of more than 10% from last week, but it is still nearly 1.4 times the same period last year. Zhang Linglu said that the main reason for the recent acceleration of corporate inventory consumption is that enterprises are preparing supplies for India, which has led to a decline in corporate inventories and an increase in port collection. The overall industry inventory has been transferred from upstream to ports, and has not actually been consumed by the market, but exports will be later. Helps ease current inventory pressure.

On the other hand, the results of India ’s bidding were announced, and the final number was 747 thousand tons. The lowest price on the East Coast was 257.65 CFR, which was an increase from the last price in 2019. After deducting port miscellaneous fees, commodity inspection, insurance, capital interest, and trader profits, it is about 244.65 US dollars / ton, equivalent to the domestic arrival price of about 1737 CNY/ton. The number of Chinese shipments for this mark is about 8 to 9, and Zhang Linglu believes that this situation may ease the current situation of loose domestic supply.

"From the perspective of demand, downstream end users and surrounding traders replenish stocks on dips. The company's advance receipt this week is better than the previous week, and prices have also increased slightly. The decline in corporate inventories is average, and the overall supply exceeds demand. The short-term Seeing that the market supply is relatively sufficient, there will be no obvious shortage. "Zhou Tao, a urea analyst at Zhongyuan Futures, said that in mid-April is the spring and summer fertilizer gap period, the shipment of compound fertilizer companies began to decrease, and spring fertilizer clearance.

At the same time, he said that the current summer fertilizer preferential policies are more cautious, grassroots does not respond strongly to the quotation at this stage, the new orders are generally sold, and the demand for urea is suppressed. The start-up of the board factory and melamine remained relatively stable, with more purchases on demand. "In the later period, the domestic urea market demand is still dominated by the high nitrogen fertilizer demand of compound fertilizer companies in the summer. Before the compound fertilizer companies further introduce preferential policies to stimulate grassroots stocking, the urea market is relatively stable." Zhou Tao said.