This year, the urea market price experienced a sharp rise after the Spring Festival, reaching 2,000 yuan/ton. After a short stay at the high point, the market price has rapidly declined and has now fallen to 1,500 yuan/ton, which has fallen into a downturn. The reporter recently interviewed some fertilizer distributors and consumers to listen to their views. The overall domestic market downturn On July 7, the reporter went to Anqing City, Anhui Province, agricultural capital market. This is the largest agricultural wholesale market in southwestern Guizhou, and mainly deals with the wholesale business of fertilizers, pesticides and seeds. The entire market was deserted, and many dealers even closed the shop. This is in stark contrast to the busy scenes and vocal scenes seen here after the Spring Festival this year. When China's urea production capacity exceeds 10 million tons this year, the international urea market has also evolved from a tight supply in 2007 to a surplus. Domestic and foreign market demand is weak, and China's large excess of urea production capacity is nowhere to be released.
At present, the overall domestic urea market is sluggish. The mainstream factory prices in Hebei, Henan, and Shandong are around 1,570 yuan/ton, and the actual transaction price of some industrial orders and large orders is between 1530 yuan and 1,550 yuan/ton. Corn dressing in Northeast China will continue for about a week, but because farmers have a large amount of fertilizer, the market will take a very small amount. Now there are still 10 days or so before corn from Hebei, Henan, Shandong, etc., dealers and ordinary people wait and see mood is heavier. Wang Xiangbing, general manager of Anfeng City Shengfeng Agricultural Assets Co., Ltd., told the reporter that the local wholesale price of urea market this year rose to 1900 yuan/ton after the Spring Festival and began to decline. Especially in mid-May, the price plummeted by 20%. After the Chinese New Year holiday, the decline in domestic urea demand made them unpredictable. Many dealers caught up with the wave of urea price rises after the Spring Festival, and they purchased a lot of goods for the purpose of spring farming. As a result, the fertility rate of farmers in spring plowing fell, and the price of urea fell quickly after a short stay at a high point, and dealers who had too late to sell suffered losses again.
Lower purchasing power of farmers <br> Due to the low prices of crops such as grain, cotton, fruits and vegetables in the first half of this year, the income of farmers was not ideal, and the financial crisis affected the income of farmers who had worked to work, resulting in a decline in the purchasing power of farmers, leading to a weak demand for chemical fertilizers. It was learned from relevant departments in Anqing that this year the rapeseeds in Anqing City have an average yield of 145 kilograms and a total output of 290,000 tons. Compared with last year, the increase in unit production and total output was 31.8% and 20.8%, respectively. However, this year, the new rapeseed seeds have a low purchase price, and the market situation is not optimistic. According to people in the price department, in late May, the city's new rapeseed seeds had been scattered and the scale of acquisitions had dropped by 56% year-on-year. At noon on July 7th, in the village of Hekou, Daguan District, one of the grain, rapeseed, cotton, and vegetable growing bases in Anqing, Qi Jinhua, a 56-year-old woman villager, was weeding high temperatures in her home’s cotton fields. Qi Jinhua, who was sweating, told reporters that her family had 5 acres of dry land, which was planted with rape and cotton in two seasons. Each year, he consumed urea as a bag. The local retail price of 40 kg/bag of urea was RMB 80/bag after the Spring Festival and it is now RMB 65/bag. In the first half of the year, the yield of rapeseed was about 200 kilograms per mu, and the output increased compared to last year. However, the purchase price this year has fallen much more than last year, and the income has decreased. This affected her and the villagers' enthusiasm for planting cotton and rapeseeds in the next season, and also affected their confidence in storing chemical fertilizers in the second half of the year.
Imbalance in supply and demand in the international market <br> While the domestic urea market is in the doldrums, the international urea market is also not optimistic. In the past, the domestic demand for urea weakened, and domestic urea production companies generally looked to the international market. However, the international urea market also appears surplus.
According to IFA's forecast, the maximum supply of urea in 2009 is expected to be 159.2 million tons and the demand is 154.8 million tons. Global urea supply has evolved from supply shortages in 2007 to a gradual surplus in 2008 and 2009. The new production capacity of global urea for export mainly comes from the Middle East. The export volume of urea in the Middle East exceeds that of the former Soviet Union, rising from 8 million tons in 2007 to more than 10 million tons in 2008. The urea produced in this area is mainly based on natural gas. China's urea production is dominated by coal, supplemented by natural gas and petroleum, and it is at a disadvantage in the cost of urea production. In recent years, the production capacity in the Middle East has been accelerated, and it has been used for a relatively small amount, mainly for exporting to the international market. Due to obvious advantages in the cost of raw materials, it has caused a major impact on China's urea exports.
Urea industry expects to get out of trouble
At present, most of the urea manufacturers around the country still take the form of Fed co-delivery to take delivery of goods to related customers. The light reserve market has no obvious signs of start-up. Dealers generally stated that they must continue to observe for some time before deciding whether to carry out light storage. Under the huge sales pressure, manufacturers can only continue to lower the ex-factory price, but as the low-end price gradually bottoms out, the decline rate is obviously slower than the previous period. Currently, the space for low-end prices to continue to decline has been very limited, if the coal price does not appear. With large fluctuations, the domestic urea market is expected to usher in temporary stability. Wang Xiangbing, general manager of Anfeng City Shengfeng Agricultural Resources Co., Ltd., told reporters that to change the current status of the urea market downturn, on the one hand need to increase the purchase price of agricultural products, increase the income of farmers, improve the purchasing power of farmers, so that they have confidence and ability Increase the reinvestment of agricultural production, thereby stimulating the consumption of chemical fertilizers.
On the other hand, relevant departments of the state must formulate a medium- and long-term development plan for the fertilizer industry, accelerate the internal integration of the fertilizer industry, avoid the blind expansion of domestic fertilizer production capacity, and encourage large-scale fertilizer companies with cost advantages, resource advantages, and production technology advantages to do great work. Strong. Industry insiders pointed out that the introduction of the petrochemical industry adjustment and revitalization plan will accelerate the elimination of outdated urea production capacity, which is expected to solve the problem of overcapacity in the urea market, and will provide new development space for competitive enterprises.
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