Six factors affect the urea market this year

On the whole, there are six factors that will affect the urea market trend in 2018.

First, the output is expected to rebound. In recent years, urea production has declined year after year, especially in 2017, which is a large drop, exceeding 10%. It is expected to rebound in 2018. After the market is raging, the backward production capacity has basically been eliminated. The remaining urea enterprises are basically low-cost and competitive enterprises. If there is no strong interference from external factors, these enterprises can maintain high-load production. In the heating season in the first quarter and the fourth quarter, the supply of natural gas is tight, combined with the need to control the air pollution in winter, the environmental protection and production limit is strict, and the operating rate of enterprises is relatively low. The production environment in the second and third quarters is relatively loose, and the supply of natural gas and coal is greatly improved. It is expected that the operating rate of enterprises will exceed 60%.

Second, the demand for agriculture has declined and industrial demand has increased. The demand for soil fertilization, zero fertilizer growth, organic fertilizer substitution, low agricultural prices, and increased application of compound fertilizer, ammonium chloride and ammonium sulfate are expected to reduce agricultural urea demand by more than 3% in 2018.

Industrial urea use is growing. According to relevant analysts, the demand for urea in the wood-based panel industry accounts for more than 60%. In 2015, the total output of domestic wood-based panels exceeded 280 million cubic meters. According to the calculation of urea gas consumption of 10,000 tons per 10,000 cubic meters of plate, the demand for urea exceeded 11 million tons. With the changes in consumer demand and ideas, the future of wood-based panels will maintain a growth rate of around 5%. Another major increase in industrial demand is diesel vehicle exhaust gas treatment, and the country is advancing the National Five Emissions Regulations, which means that the automotive urea market will usher in a period of rapid growth in recent years. It is estimated that the annual SCR system will increase by 350,000 units per year. According to the calculation of 150,000 kilometers per vehicle per year and 1.5 liters of vehicle urea solution per 100 kilometers, the demand for vehicle urea will increase by about 260,000 tons per year.

Third, it is difficult to export and wary of imports. International urea has a cost advantage. In the first half of 2017, the international urea price was as low as 180 US dollars (ton price, the same below), and domestic enterprises can still insist on production. In the second half of the year, driven by the Indian urea tender, it rose for two consecutive months, with the highest price exceeding $290. Due to the low cost, international urea manufacturers are more than capable, and they can continue to produce when the price is low, and earn more when the price is high. The high cost of urea in China can only be exported when the international price is high, and it cannot be exported when the price is low. In 2018, with the introduction of new urea plants in the United States and other places, the international urea production increased further, and China's urea exports were more difficult. It is estimated that the annual export volume is difficult to exceed 5 million tons.

Not only that, but there may be import problems in 2018. If the international price is lower than the domestic price of more than 50 US dollars, imports are possible. The most likely import in South China is due to the inability to compete with urea in the north. At present, the urea plants in the south of the Yangtze River have been greatly reduced, and the market has a large gap. Imported urea may take advantage of it.

Fourth, coal prices support urea prices. Most of China's urea is made from coal, and the price of urea is greatly affected by coal prices. What is the trend of coal prices in 2018? The 2018 coal-fired long-term negotiations in late November 2017 may provide some reference. The annual long-term price is composed of “base price + floating price”. The benchmark price is 535 yuan in 2017, and the proportion of long-term sales of some large coal companies has increased from 80% to 90%. The increase in the proportion of long-term associations will narrow the expectations of coal price declines, and coal prices will return to a reasonable range. Overall, coal prices will continue to run at a high level in 2018, which means that urea production costs are high, and prices will form strong support at around 1,400 yuan.

Fifth, the new urea is further increased. Traditional urea competition is fierce, and many manufacturers are developing new urea, which can improve fertilizer efficiency on the one hand and better benefits for enterprises on the other hand. It is understood that the current value-added urea production capacity of zinc humic acid urea and alginic acid urea has exceeded 10 million tons, and the development momentum is good.

Sixth, it is greatly affected by the liquid ammonia and methanol markets. Many domestic urea manufacturers use synthetic ammonia-alcohol technology, which can produce both synthetic ammonia and methanol. Urea manufacturers can sell intermediate liquid ammonia or can be processed into urea products for sale. The relationship between urea, liquid ammonia and methanol is close. Manufacturers tend to produce which products are more expensive and have better benefits. In 2017, the liquid ammonia and methanol markets were strong, supporting the high price of urea. Will the liquid ammonia and methanol markets continue to maintain a strong trend in 2018? This will have a great impact on the urea market and deserves industry attention.

Total 1 | <First <Prev 1 Next> Last> |
share to:

Braided Hose

SanYin are professional for Shower Hose and braided hose, more than 10 years experience.we have 2 pcs production line for shower hose, and 1pcs for braided hose. 90% products export and 10% for local market. The main market is Poland, France, Italy,Germany, Russia,Turkey. U.K, U.S.A and so on.

Length: 15cm,20cm,25cm,30cm,50cm

Material: stainless steel 201/304/Aluminum

Nut size: F1/2"XF1/2"

Nut material: brass/stainless/zinc/plastic

Core: brass/stainless steel/nylon

Inner tube: EPDM/PVC

Original: Yuyao,Zhejiang

Pacakge:polybag/double blister/color box

Braided Hose

Braided Hose,Plastic Abs Faucet,Braided Metal Hose,Braided Flexible Hose

Yuyao Sanyin Bathroom Technology Co Ltd , https://www.chinasanyin.com