Sinopec News: Peak Season for Traditional Demand, Urea Prices Steady and Rising

In the recent urea market, prices have been fluctuating with a slightly stronger overall trend, stabilizing within a range. On March 17, the average market price of urea small-to-medium granules in China was 1,888 yuan/ton, up 0.03% from the previous business day. On the supply side, some plants in Hainan and Sichuan are undergoing maintenance; daily output remains at a high level within the year. On March 17, China’s urea daily production was 218.9 thousand tons, up 9.29% month-over-month and year-over-year. Supply is ample. On the demand side, downstream compound fertilizer enterprises have maintained good production momentum, with the weekly capacity utilization rate at 50.49%, up 2.18 percentage points month-over-month. Support from demand in the traditional peak season remains relatively solid. Urea producers mainly receive advance orders; as off-season reserve stockpiling and releases are underway, the room for price increases is limited.

In the short term, urea plant operating rates will likely change little. With prices rising, downstream procurement is becoming more rational. Combined with the fact that domestic reserve supply is higher than the same period last year, the pace of reserve stock release is expected to be faster than in previous years. As market circulating supply continues to increase, the phased pattern of supply strong and demand weak is becoming more evident. In the middle to late part of March, prices may loosen. It is expected that the overall market price movement will remain within a range of 20–30 yuan/ton, fluctuating. The southern market is expected to have a smaller range than the northern market. (Sino-Analytics Information)