Urea for agricultural use

Urea Agricultural Market Dynamics Intelligence

I. Price Trends
1. Domestic Market: Recently, domestic urea prices in China have shown a slight upward trend with minor fluctuations. Main production areas have generally raised ex-factory prices by 20–50 yuan/ton, with some regions seeing increases of up to 80 yuan/ton. In major agricultural provinces such as Shandong and Henan, mainstream ex-factory prices range between 2,250 and 2,350 yuan/ton.
2. International Market: International urea prices are mixed, with some regions seeing increases and others declines. Small-pellet urea FOB prices in the Black Sea region remain stable at USD 280–290/ton; prices in the Baltic region have slightly decreased, with FOB prices at USD 270–280/ton; meanwhile, prices in Southeast Asia have risen slightly due to increased demand, with FOB prices at USD 320–330/ton.

II. Supply Situation
1. Domestic Capacity: The overall operating rate of domestic urea enterprises remains at a relatively high level, averaging approximately 75%–80%. Some large-scale facilities are operating stably with high daily output, while others have experienced fluctuations in operating rates due to equipment maintenance or raw material supply issues.
2. Inventory Levels: Urea enterprise inventories are trending downward. Current total enterprise inventories are approximately 300,000–400,000 tons, a 10%–15% decrease from previous levels. Port inventories have remained relatively unchanged at around 200,000 tons, influenced by export policies.

III. Demand Situation
1. Agricultural Demand: As the spring agricultural fertilizer season approaches, agricultural stockpiling demand is gradually being released. Demand for top-dressing fertilizer for winter wheat in the northern regions is increasing, while procurement of basal fertilizer for early rice planting in the southern regions is also underway, leading to a growing trend in agricultural demand for urea.
2. Industrial Demand: The operating rate of compound fertilizer enterprises has increased, currently averaging 50%–55%, which has boosted urea demand. The operating rate of melamine enterprises remains stable at 60%–65%, maintaining steady procurement demand for urea.

IV. Cost Aspects
1. Coal Prices: Coal, a primary raw material for urea production, has remained relatively stable recently. Mainstream factory-gate prices for anthracite coal are 1,200–1,300 yuan/ton, and thermal coal prices are 800–900 yuan/ton, providing significant support to urea production costs.
2. Natural Gas Prices: Natural gas prices are affected by seasonal factors, being relatively higher in winter. However, with rising temperatures, prices have decreased in some regions, alleviating cost pressure for gas-based urea enterprises.

V. Policy Environment
1. Export Policy: The state strictly controls urea exports, with the export legal inspection policy continuing to be enforced. Export volumes remain at low levels, providing a certain degree of assurance for domestic market supply.
2. Agricultural Subsidy Policies: Some regions have introduced agricultural subsidy policies to encourage farmers to increase fertilizer input and improve crop yields, which has stimulated agricultural demand for urea to some extent.

Analysis and Judgment
1. Price Aspects: Domestic urea market prices, influenced by supply-demand dynamics and cost support, still have upward momentum in the short term. The gradual release of agricultural demand and stable growth in industrial demand will provide strong support for prices. However, fluctuations in international market prices and export policy restrictions may also exert some suppressive effects on domestic prices.
2. Supply Aspects: The high operating rate of domestic urea enterprises ensures relatively sufficient supply. However, declining inventory levels and the arrival of the peak agricultural fertilizer season may lead to localized supply tightness.
3. Demand Aspects: Agricultural demand is currently the primary support for the urea market. As the spring fertilizer season progresses, demand will continue to increase. In terms of industrial demand, the increased operating rates of compound fertilizer enterprises and stable production by melamine enterprises will provide steady support for urea demand.
4. Cost Aspects: Coal and natural gas prices are relatively stable, providing clear support for urea costs. However, significant fluctuations in raw material prices could have a substantial impact on urea prices.
5. Policy Aspects: Strict export controls have secured domestic market supply, while agricultural subsidy policies have stimulated agricultural demand. The overall policy environment is conducive to the stable development of the urea market.

Forecast
1. Price Forecast: In the short term, domestic urea market prices are expected to continue a slight upward trend, with mainstream ex-factory prices in main production areas potentially rising to 2,300–2,400 yuan/ton. However, as the agricultural fertilizer season ends and supply increases, prices may see a pullback later.
2. Supply Forecast: The operating rate of domestic urea enterprises is expected to remain at a high level, ensuring sufficient total supply. However, attention should be paid to potential localized supply tightness due to concentrated demand release.
3. Demand Forecast: Agricultural demand is expected to peak during the spring fertilizer season and then gradually weaken. Industrial demand will maintain stable growth, providing long-term support for the urea market.
4. Market Risks: Factors such as international market price fluctuations, changes in raw material prices, and policy adjustments need to be monitored to timely address market risks.