Small granular urea

Market Dynamics Report on Small-Granule Urea

Domestic Market

1. Price Trends
- The overall price of small-granule urea in the domestic market has recently shown a stable pattern with narrow fluctuations. Ex-factory prices in main production areas such as Shandong and Henan have fluctuated within the range of 2,200–2,300 RMB/ton, with slight variations in some regions due to differences in demand.
- In Northeast China, prices have remained relatively firm at around 2,350–2,450 RMB/ton, influenced by seasonal demand. In South China, prices are slightly higher, ranging from 2,300 to 2,400 RMB/ton, due to factors such as transportation costs.

2. Supply Situation
- The operating rate of domestic urea enterprises has remained at a high level, averaging between 75% and 80%. Some enterprises that underwent previous maintenance have resumed production, while the release of new capacity has been limited. Overall, supply is adequate.
- Daily urea production has remained around 160,000–170,000 tons, sufficient to meet domestic demand, with some inventory accumulation observed.

3. Demand Situation
- In terms of agricultural demand, the peak spring fertilization season is gradually coming to an end. Apart from minor restocking needs in certain local areas, the overall purchasing enthusiasm has declined.
- Regarding industrial demand, the operating rate of compound fertilizer enterprises remains stable, with purchases made on an as-needed basis. The operating rates in industrial sectors such as melamine are average, providing limited support for urea demand.

International Market

1. Price Trends
- International prices for small-granule urea have shown mixed movements. Prices in the Middle East remain relatively stable, with FOB prices ranging from $320 to $330 per ton. Prices in Southeast Asia have risen slightly to FOB levels of $340–$350 per ton, primarily driven by increased local demand.
- The results of India’s latest urea bidding round have been announced. While the winning bid price increased compared to the previous round, the procurement volume for Chinese sources remains limited, resulting in a negligible positive impact on international market prices.

2. Supply Situation
- Global urea supply remains generally ample. Major producing countries, including China, Russia, and the Middle East, maintain stable production levels. Due to sufficient natural gas supplies, urea enterprises in some countries operate at high capacity, leading to increased export volumes.

3. Demand Situation
- International agricultural demand is currently in the off-season. Aside from procurement needs in a few countries like India, purchasing enthusiasm in other regions is low. Industrial demand growth is sluggish due to the global economic situation, resulting in limited urea demand.

Analysis and Judgment

1. Domestic Market
- On the supply side, high operating rates and ample daily production create significant supply pressure in the domestic market. Inventory accumulation may exert downward pressure on prices.
- On the demand side, the end of the agricultural peak season and insufficient industrial demand support indicate a declining overall demand trend. It is expected that domestic small-granule urea prices will continue to maintain a stable pattern with narrow fluctuations in the short term, lacking upward momentum.

2. International Market
- The international market features ample supply and an off-season for demand. Although Indian bidding prices have risen, the limited procurement volume for Chinese sources makes it difficult to effectively support international market prices. It is expected that international small-granule urea prices will continue to exhibit a weak, oscillating pattern.

Forecast

1. Domestic Market
- Over the next week, domestic small-granule urea prices are expected to fluctuate within the range of 2,200–2,350 RMB/ton. Some regions may see minor price reductions for promotional purposes due to inventory pressure.
- In the medium to long term, as the summer fertilization peak approaches, agricultural demand may increase. However, considering ample supply and weak industrial demand, the likelihood of significant price increases is low. Prices are expected to remain relatively stable.

2. International Market
- Over the next month, international small-granule urea prices are expected to fluctuate within the range of $320–$350 per ton. Influenced by supply and demand dynamics, prices are unlikely to see significant increases and may continue to operate in a weak trend.