Urea will enter 2021 with good news

Under the pandemic in 2020, all walks of life can write many kinds of bitterness, but the good point is that most fertilizer factories are of adequate scale and the market is highly resistant. As food grain, the heat of grain is running at a high level. The price of chemical fertilizers is higher than the level of the same period last year; this year, the urea supply pattern has also undergone some changes: some companies that have stopped production for a long time have been put into production one after another, and some old devices have also withdrawn from the market; the impact of environmental protection is also becoming more and more normal. Since mid-October, Shanxi’s Jincheng area has been in a state of limited production and maintenance. According to government documents, it may affect the production of 2.5 million tons of urea; and the supply of natural gas is tight, making gas-head companies also continue to start after the end of November. Entering the production suspension stage, with the deepening of production suspension and production restrictions, the daily physical output of urea has fallen to 110,000 tons. However, it is also a blessing and disaster. The price trend of urea at the end of the year remains relatively high. Therefore, it is expected that the supply may increase after the start of 2021. The price may fall.

Raw material prices

The international situation has intensified this year. The IEA's 2020 coal report shows that the recovery of global coal demand is mainly driven by strong demand from China, India and Southeast Asia. At the same time, rising natural gas prices and growth in electricity demand in Europe and the United States will help ease the structural decline in coal demand, which will be the first increase in coal demand in the past decade. It is reported that small coal mines have been shut down recently and production capacity has gradually concentrated. The overall supply is relatively stable. It is expected that the overall supply should remain relatively stable next year, and the overall price will be relatively stable; the domestic supply of natural gas is still relatively short, but slightly better than the market in previous years It is expected that China's natural gas market supply in 2021 will further increase.

Environmental issues

This year, environmental protection affects the urea itself and the downstream market. The most intuitive manifestation is the long-term suspension of production in Jincheng, Shanxi. In terms of the efficiency of environmental protection promulgation, it appears more and more frequent, and it is not only the suspension of downstream chemical plants. During the environmental protection warning period, overall transportation is also restricted, and the impact of environmental protection on urea is gradually deepening. It is expected that as environmental protection standards gradually approach perfection, the elimination of some energy-intensive urea enterprises will be accelerated.

supply

The supply of urea has increased in 2020, but due to the impact of the epidemic, the new equipment of some companies has not been put into production this year. The details are as follows: Shandong Ruixing has added a new set of 1 million tons of equipment per year. As of now, it has been informed of the January plan Production; Xinlianxin plans to invest in a new plant with a capacity of 800,000 tons in Jiujiang; Hubei Sanning adds 800,000 tons of urea plant and plans to start production in the first quarter of 2021; Jiangsu Shuangduo plans to start production in September 2021, with an annual design capacity of 104 Ulan Group plans to resume production of 1.2 million tons from June to July in 2021. The overall annual production capacity of urea may increase by 5 million tons, but the specific production time of each company still needs to be determined.

demand

China's real estate industry will enter a stable, weak, and declining trend. Some regional governments encourage the abandonment of price-cut sales. In 2021, real estate will basically maintain a stable and weak downward trend. The demand for plywood factories will weaken with the weakening of real estate. It is expected that the overall industrial demand will remain weak in 2021. The pattern of market supply and demand has changed. Under the background of rising food prices, there is an expectation of rising prices of chemical fertilizers. Since 2020, due to the tight global agricultural supply, agricultural products have started to rise, and the demand recovery in the second half of the year will be superimposed. The prices of agricultural products represented by corn and wheat Fast upward. According to estimates, the output of the 2020-2021 season is 1.145 billion tons and the consumption is 1.157 billion tons. The global supply and demand gap has appeared for 4 consecutive years, and the inventory consumption ratio has fallen to 25.7%, which has declined for 3 consecutive years. Corn is expected to continue to be on the upward channel in the future. The structure of rice supply and demand continued to be tight, and the balance of production and demand fell to 980,000 tons. It is expected to maintain a moderate upward trend in the future.

There is still a demand gap in the international market. Affected by the epidemic, India’s dependence on imported chemical fertilizers has increased. Regardless of price, transportation distance, or supply, China’s urea is still the most preferred, and this year’s continued bidding is sufficient. Withdraw this.

Comprehensive analysis. Although the performance of the urea market in many places this year is not very good, it is by no means bad. The export volume has increased and the domestic supply pressure has decreased. However, after entering 2021, the market supply will further intensify and the overall market competition will increase. Although there is potential demand in the autumn market, the pressure of market competition is relatively high. It is expected that the possibility of a substantial rebound of urea after January is relatively low. It is expected that the urea market will improve at the end of the first quarter. After entering the second quarter, Before the end of the autumn market demand, the price of urea should run at a high level, and then it will usher in a wave of decline. After entering the second half of the year, the price of urea in the summer and autumn season will fluctuate within a narrow range, but it still needs to pay attention to the starting trend.