How much more room is there for urea prices to rise?

Currently, driven by exports, the domestic urea market is gradually turning favorable, with prices rising sharply in some regions. In Shandong, due to continued good export conditions, local industrial fertilizer use is gradually increasing, and combined with some manufacturers shipping products to Jiangsu, Anhui and other places, quotations were raised sharply last week, with an increase of about 40 yuan/ton, and actual local sales prices also rose to around 1,510-1,530 yuan/ton, but new order transactions from manufacturers are currently limited, and exports remain the main market. Prices in the Lianghe region also rose sharply. Hebei is mainly export-oriented, and the local sales market remains persistently weak, with only a few manufacturers doing fairly well supplying industrial fertilizer. Last week, mainstream quotations were raised to 1,530 yuan/ton, an increase of about 50 yuan/ton. In Henan, local sales conditions have improved somewhat, and purchasing enthusiasm among compound fertilizer manufacturers has increased. Although most are orders paid for earlier, shipments have continued to be good, and combined with export demand, most manufacturers raised quotations by about 30 yuan/ton. At present, actual local sales prices in the Lianghe region are all around 1,500-1,510 yuan/ton. In Shanxi, although local sales remain sluggish, most manufacturers have good export conditions, and station quotations for outward shipments rose to around 1,500 yuan/ton, up about 50 yuan/ton from last week. Actual station prices are now around 1,450-1,470 yuan/ton. In Anhui, most manufacturers have had good shipments in recent days. Supported by export orders and by earlier orders for industrial and agricultural use, some manufacturers are currently short of supply, and prices were raised sharply by nearly 90 yuan/ton. Mainstream quotations have now risen to around 1,620 yuan/ton, and actual local sales prices are also around 1,600 yuan/ton, but most orders from manufacturers are currently earlier paid orders, with few new transactions concluded. In northern Jiangsu, however, shipments from some manufacturers are not ideal. Export orders are limited, and products from other provinces are seizing the local industrial market. Although prices have also risen slightly, overall market transactions are sluggish. In southern Jiangsu, some manufacturers are preparing fertilizer in advance for topdressing late rice, but local manufacturers are mostly export-oriented and prices are relatively high. Manufacturers in Shandong, Shanxi and other places often ship goods there, with arrival prices mostly around 1,630-1,640 yuan/ton. The Sichuan market remains mainly stable, with manufacturers' sales conditions relatively good. Supported by the improving overall environment and by some distributors doing off-season storage in advance, prices rose slightly, with mainstream quotations rising to around 1,580 yuan/ton, while actual local sales prices remain around 1,500-1,550 yuan/ton.

In the international market, both large and small granular FOB prices rose sharply across the board. Black Sea and Baltic small granular FOB prices rose by 9 USD and 3 USD/ton respectively to 315-322 USD and 308-313 USD/ton; Baltic large granular rose to 345-352 USD/ton, up 15 USD/ton from last week. China's small granular FOB price was raised by 14 USD/ton to 280-285 USD/ton, and the large granular FOB price also reached around 330 USD/ton. It is understood that at present China's port receiving price for small granular is already around 1,600-1,630 yuan/ton, and some manufacturers have even higher target prices and are unwilling to ship. The port arrival price for large granular has also risen to 1,920-1,950 yuan/ton, and it is still in a state of shortage.

At present, the domestic urea market is gradually improving, and export prices keep rising. On the large granular side, orders from some manufacturers can last until September, and on the small granular side, most export manufacturers can also ship until the end of August. This means domestic urea prices will remain stable in the short term, and may even have some further room to rise. However, it is understood that because large granular prices keep soaring and sea freight has also risen somewhat, the price of goods taken locally in the United States keeps climbing. To control prices, urea prices in the New Orleans area of the United States have already shown a downward trend. If the US side continues to control prices, the rise in large granular prices may be affected. Overall, because small granular export orders provide fairly strong support and domestic industrial fertilizer use is gradually recovering, it is expected that urea prices still have room to rise in the short term, while the long-term trend requires continued attention to export conditions; on the large granular side, because ports remain short of supply, its price may continue to rise, and if the international market changes because of the US market, its upward trend will gradually be restrained.