From the end of May in India, to the opening of the bid in the past two days, the domestic urea market is like a roller coaster, half a month experienced a wave of roller coaster like the market. With the gradual opening of the printing price, the domestic lively market has come to an end for the time being. Back to the fundamentals, the small wave market will continue to repeat, but the overall trend is likely to run downward.

The effect of the mark is big thunder but little rain

The printing mark, the time is just in a more sensitive time node, the domestic experienced as long as two months of falling market, industrial and agricultural demand and just superimposed together, so the printing mark this fuse, ignited this wave of rapid rebound in the domestic market. However, in fact, from the point of view of the printing price, the lowest CFR284.9 US dollars/ton on the East coast, the calculation of domestic mainstream regions are less than 1,800 yuan/ton, and the current spot price difference of at least 200 yuan/ton; Then the latest shipping date is July 17, when the summer fertilizer market in the mainstream region is not completely over; Finally, the volume of 800,000 tons in China and Arab countries, the supply of 2.52 million tons, the world also has sufficient supply for supply. Therefore, in terms of volume and price time, the degree of domestic participation is relatively limited, and for the substantial role of the country, it may also be a small impact, then the market should return to the fundamentals.

Domestic demand gradually weakened the limitations of agricultural support

With the weakening of the peak demand for high nitrogen fertilizer, the construction of enterprises has declined, the temporary construction of compound fertilizer enterprises is showing a downward trend, and the demand for raw material urea will also be significantly reduced, and it is preliminarily estimated that there will be a small increase in July. In the plate industry, due to the high temperature and rainy weather in summer, the demand for urea will also decline, so the main demand will be concentrated in the agricultural market. After the wheat harvest in the mainstream area, it temporarily enters an agricultural gap period, and after ten or twenty days, along with the growth cycle of crops, there will be an appropriate amount of topdressing demand in some areas, and then there will be a short-term agricultural demand peak combined with the weather. However, after July, agricultural demand is also mainly concentrated in the two seasons a year area, so there is support, but it is very limited, and the sustainability is limited.

The supply of inventories plus starts is relatively ample

This round of roller coaster market has also promoted a sharp decline in corporate inventories. As of this week, the latest data show that the physical inventory of urea enterprises is about 620,000 tons, compared with the highest value of 1.16 million tons, a reduction of 540,000 tons, shrinking by half. Most of this part of the supply may be digested by industry and agriculture, but also a small amount of it has flowed into the fertilizer market in the mainstream region, mainly because of the long-term decline in the previous market, resulting in a part of the reserve demand delayed. Then according to this inventory, combined with this year’s production increase and the temporary increase in exports, for the same period, the inventory is basically calculated into the theoretical normal range.

And the next decline in inventory is likely to slow down, mainly because the industry started enough in the same period. According to Longzhong data, the urea industry daily output of 174,800 tons on June 14, an increase of 0.70 million tons over the same period. In the middle of the month, Daqing Petrochemical and Aowei have parking maintenance plans, and in the second half of the month, Yangmei Plain, Henan Xinlianxin, Mingshengda, Jinxin and other plants are expected to have maintenance plans, and the daily output can be reduced to less than 170,000 tons in the second half of the year, but even so, the daily output is less than 160,000 tons. Before and after July, there are two sets of new production capacity may be released, and the relatively sufficient supply is the biggest pressure on the market.

In summary, the fundamentals of short-term domestic urea are weak as a whole, even if the recent pan recovery, but also can not block the spot downward trend, only may be to buffer the decline rate. Based on the summer topdressing market, the right amount of industrial demand and the decline in construction, even a small amount of export behavior, etc., if more than two sides appear, there can still be regional small markets, so what is currently done is to wait for fundamental changes in the price reduction process.