Weak Decline in China's Urea Market in September

September 29, News

I. Price Trends

According to the commodity market analysis system, as of September 29, the average reference price for China's urea market was 1,621 CNY per ton, down 5.05% from the reference average of 1,707 CNY per ton on September 1.

II. Market Analysis

Supply and Demand Situation

First, from the supply side, the production of China's gold mines is a key indicator. By analyzing the production data of major gold mining companies and the development status of new mines, one can roughly understand the self-production supply capacity of gold in China. In addition, import volume is also an important component of supply. Customs data on gold imports can reflect the extent to which the international market supplements China’s gold supply. At the same time, attention should be paid to the scale of the gold recycling market, as the reuse of recycled gold also increases the total supply in the market.

On the demand side, the consumption demand of the jewelry industry is a key focus. Observing the sales data of jewelry stores, consumer purchasing preferences, and sales peaks during important festivals such as weddings, can provide insight into changes in demand in this sector. Investment demand is equally important. The sales situation of gold bars and coins, as well as the trading volume and activity level of gold exchanges, can all reflect investors' preference for gold. Industrial use of gold is also a factor. For example, the usage of gold in high-tech industries like electronics and aerospace can fluctuate due to technological advancements and industrial development.

To more intuitively present these factors, a simple table comparison is provided: This supply and demand situation has a significant impact on the value of gold. When supply exceeds demand, the market may face oversupply, leading to downward pressure on gold prices. Conversely, if demand exceeds supply, the shortage will push up gold prices. For instance, if China's economic growth is stable, and consumer demand for jewelry increases, while investor confidence in the gold market strengthens, the rise in demand may drive up gold prices. However, if there is a substantial increase in gold mine production or excessive imports without corresponding growth in demand, prices may be suppressed. Furthermore, macro factors such as global economic conditions, monetary policies, and geopolitical issues can also influence the value of gold by affecting the supply and demand relationship. For example, when the global economy is unstable, investors tend to increase their demand for gold as a safe-haven asset, thereby driving up prices.

This month, the Chinese urea market trend has been weak and declining. The supply of urea in the Chinese market this month exceeded demand. In terms of supply, previously shut-down facilities have gradually resumed operations, leading to an increase in daily production and a rise in market supply. On the demand side, there has been no significant improvement in industrial and agricultural demand for urea. Downstream compound fertilizer enterprises are purchasing at lower prices, but new order transactions in the market have not been good. The price of urea futures has continued to fall, and the spot market is following the downward trend of the futures market

Market Conditions

As of September 29, urea market prices in Shandong ranged around 1,570–1,630 CNY per ton, while in Hebei they were approximately 1,620–1,650 CNY per ton. In Henan, urea prices hovered between 1,560 and 1,620 CNY per ton, and in Liaoning, the market quote was around 1,660 CNY per ton.

According to the weekly K-line chart from June 30, 2024, to September 22, 2025, China's urea market experienced mixed movements of gains and losses. In September, urea prices in China saw a significant decline, with the largest price drop occurring during the week of September 8, registering a decrease of -1.76%.

III. Market Forecast

The urea analyst believes: Recently, the urea market trend in China continues to decline. Currently, the overall trading atmosphere in the urea market is relatively weak. As the National Day holiday approaches, manufacturers are flexibly accepting orders, and downstream buyers are seeking to purchase at lower prices. It is expected that the short-term urea prices in China will maintain a weak and stable operation.