In 2010, the domestic urea market was ups and downs, fluctuating dramatically, and the speed of change and the magnitude of the change were rare in the past years. In 2011, the overall situation of the urea market was more complicated, and the variables faced were more. Advantageous factors and unfavorable factors coexisted, and the bad market was accompanied by bullishness. From a large perspective, it is expected that the contradiction between supply and demand in the urea market will be eased, subject to high production costs, urea prices will be operating at high levels, and the annual average price may hit a record high.
In 2010, the urea market showed four major characteristics: First, the price trend was abnormal, the peak season fell, and the off-season rose. The lowest ex-factory price was only 1,500 yuan (t price, the same below), and reached the high of 2,000 yuan in mid-November; Urea production declined for the first time in ten years. According to statistics from the National Bureau of Statistics, China produced 52.14 million tons of urea from January to November, a year-on-year decrease of 6.4%. Third, exports hit a record high, and it is expected that urea exports could exceed 6 million tons in 2010. Fourth, delayed storage was mainly due to the high price of urea after the second half of 2010, dealers are afraid to take risks and do not want to light storage, and manufacturers are busy with exports, no time to take into account the domestic market, resulting in low reserves of domestic urea market , light storage postponed.
Supply and demand contradictions have eased and forecasted In 2011, with the completion of the energy-saving and emission-reduction tasks, many urea companies resumed normal production, and the output growth is expected to be around 5%, basically returning to 2009 levels. In terms of demand, it is expected that the increase in demand for agricultural urea will be about 2%, and the total national demand will reach about 43 million tons. The demand for industrial urea is expected to grow rapidly and the annual consumption will reach about 7 million tons. On the export side, affected by the tightening of national tariffs, urea exports in 2011 are expected to decline to about 5 million tons.
In this way, the supply and demand situation of the urea market in 2011 will change: the output will increase by 3 million tons, the export will decrease by 1 million tons, the domestic market supply will increase by 4 million tons, the agricultural demand will increase by 800,000 tons, and the industrial demand will increase by 1.5 million tons. The demand increased by 2.3 million tons. Relatively speaking, the increase in market supply exceeds the increase in demand, which will exceed 1.7 million tons. Compared with the difference of 5 million to 6 million tons in previous years, the difference between 2011 and 2011 has been greatly reduced, and the contradiction between supply and demand in the market will be significantly eased.
Especially in the first quarter of 2011, the contradiction between the supply and demand of the urea market is not outstanding, and even some regions may be in tight supply. The main reason for this is the large amount of energy conservation and emission reduction after August 2010 and the significant increase in export volume, resulting in a reduction of 6 million tons in the supply of urea market nationwide, and a serious shortage of urea stock reserves, and thus in 2011 The first quarter of the market has a greater impact.
Maintaining high prices for operation In 2011, the urea market price will reach a new level on the basis of 2009 and 2010. Most of the time, the price of urea will remain at a high level. The annual average price may be close to or even exceed the historical high level in 2008. Taken together, the reasonable range of urea price in 2010 is: the ex-factory price is 1800-2200 yuan, the wholesale market price is 1850-2300 yuan, and the market retail price is 1900-2500 yuan. There are three main reasons:
The first is high production costs. Today, both natural gas and coal prices are operating at high levels. Since June 1, 2010, industrial natural gas has risen by 0.23 yuan/cubic meter, and the cost of tons of urea by gas-headed urea producers has risen by about 200 yuan. At present, the price of anthracite lump coal is generally between 1,600 and 1,700 yuan, and some even as high as 1,800 yuan. The urea cost of these enterprises is generally more than 1,900 yuan.
The second is the increase in the prices of agricultural products. In 2010, the prices of agricultural products increased significantly, and the price increases of rice, wheat, corn and other food products were all above 10%. The growth of cotton and other economic crops and vegetables and fruits was even greater, and the increase in many varieties doubled or even doubled. In 2011, the price of agricultural products is still expected to be in an upward channel, which is conducive to mobilizing the enthusiasm of farmers for planting, which will be beneficial to the urea market.
Third, the international urea price is at a high level. Affected by various factors such as rising international food prices, rising international oil prices, and loose monetary policies in the United States, international urea prices are expected to remain high in 2011. Although China's fertilizer export policy in 2011 is tight, international fertilizer prices still have a certain impact on the domestic market, especially in the off-season, due to the free export of urea, the prices of the two are basically the same.
The market trend is relatively stable. Due to fierce market competition, more and more urea production companies are developing their product differentiation. Peptide urea, smart urea, coated urea, and new urea containing urea have been vigorously promoted and are currently on the market. Have a place on the table. In 2011, it is expected that there will be more new urea producers, more species and more output, which is expected to become a major highlight of the urea market. In addition, with the continuous development of BB fertilizer and the increase of mechanized fertilization, the processing and export situation is better, and large grain urea also has a certain market opportunity.
In 2011, transportation conditions are also expected to improve further. With the large-scale construction and opening of railways and highways, the transportation conditions have improved significantly. In addition to individual remote areas and individual time periods, the “transportation bottleneck†of the previous urea market has basically disappeared. In this way, there will be two major changes in the urea market: dealers will have to reduce urea production in advance because of concerns about transportation shortages, and they will need to purchase them now; they will avoid drastic reductions in urea shipments due to tight transport, which will lead to a substantial rise in urea prices. As a result, the market has become relatively stable.
In addition, the urea market in 2011 should also pay attention to several dynamics: First, urea is a high energy consumption industry, the main raw materials and costs come from coal, gas, electricity and other resources, resource price reform is worthy of attention; second is soil testing and fertilizer application promotion Implementation situation, the future direction is to reduce nitrogen and phosphorus control and potassium, soil testing and formula fertilization will reduce the amount of urea, its progress is worth attention; Third, urea enterprises operating rate changes should pay close attention, if the operating rate is too low, it is possible Lead to the domestic urea market in short supply; Fourth, the overall economic environment, the severity of China's economic inflation, will also have an impact on urea prices.
In 2010, the urea market showed four major characteristics: First, the price trend was abnormal, the peak season fell, and the off-season rose. The lowest ex-factory price was only 1,500 yuan (t price, the same below), and reached the high of 2,000 yuan in mid-November; Urea production declined for the first time in ten years. According to statistics from the National Bureau of Statistics, China produced 52.14 million tons of urea from January to November, a year-on-year decrease of 6.4%. Third, exports hit a record high, and it is expected that urea exports could exceed 6 million tons in 2010. Fourth, delayed storage was mainly due to the high price of urea after the second half of 2010, dealers are afraid to take risks and do not want to light storage, and manufacturers are busy with exports, no time to take into account the domestic market, resulting in low reserves of domestic urea market , light storage postponed.
Supply and demand contradictions have eased and forecasted In 2011, with the completion of the energy-saving and emission-reduction tasks, many urea companies resumed normal production, and the output growth is expected to be around 5%, basically returning to 2009 levels. In terms of demand, it is expected that the increase in demand for agricultural urea will be about 2%, and the total national demand will reach about 43 million tons. The demand for industrial urea is expected to grow rapidly and the annual consumption will reach about 7 million tons. On the export side, affected by the tightening of national tariffs, urea exports in 2011 are expected to decline to about 5 million tons.
In this way, the supply and demand situation of the urea market in 2011 will change: the output will increase by 3 million tons, the export will decrease by 1 million tons, the domestic market supply will increase by 4 million tons, the agricultural demand will increase by 800,000 tons, and the industrial demand will increase by 1.5 million tons. The demand increased by 2.3 million tons. Relatively speaking, the increase in market supply exceeds the increase in demand, which will exceed 1.7 million tons. Compared with the difference of 5 million to 6 million tons in previous years, the difference between 2011 and 2011 has been greatly reduced, and the contradiction between supply and demand in the market will be significantly eased.
Especially in the first quarter of 2011, the contradiction between the supply and demand of the urea market is not outstanding, and even some regions may be in tight supply. The main reason for this is the large amount of energy conservation and emission reduction after August 2010 and the significant increase in export volume, resulting in a reduction of 6 million tons in the supply of urea market nationwide, and a serious shortage of urea stock reserves, and thus in 2011 The first quarter of the market has a greater impact.
Maintaining high prices for operation In 2011, the urea market price will reach a new level on the basis of 2009 and 2010. Most of the time, the price of urea will remain at a high level. The annual average price may be close to or even exceed the historical high level in 2008. Taken together, the reasonable range of urea price in 2010 is: the ex-factory price is 1800-2200 yuan, the wholesale market price is 1850-2300 yuan, and the market retail price is 1900-2500 yuan. There are three main reasons:
The first is high production costs. Today, both natural gas and coal prices are operating at high levels. Since June 1, 2010, industrial natural gas has risen by 0.23 yuan/cubic meter, and the cost of tons of urea by gas-headed urea producers has risen by about 200 yuan. At present, the price of anthracite lump coal is generally between 1,600 and 1,700 yuan, and some even as high as 1,800 yuan. The urea cost of these enterprises is generally more than 1,900 yuan.
The second is the increase in the prices of agricultural products. In 2010, the prices of agricultural products increased significantly, and the price increases of rice, wheat, corn and other food products were all above 10%. The growth of cotton and other economic crops and vegetables and fruits was even greater, and the increase in many varieties doubled or even doubled. In 2011, the price of agricultural products is still expected to be in an upward channel, which is conducive to mobilizing the enthusiasm of farmers for planting, which will be beneficial to the urea market.
Third, the international urea price is at a high level. Affected by various factors such as rising international food prices, rising international oil prices, and loose monetary policies in the United States, international urea prices are expected to remain high in 2011. Although China's fertilizer export policy in 2011 is tight, international fertilizer prices still have a certain impact on the domestic market, especially in the off-season, due to the free export of urea, the prices of the two are basically the same.
The market trend is relatively stable. Due to fierce market competition, more and more urea production companies are developing their product differentiation. Peptide urea, smart urea, coated urea, and new urea containing urea have been vigorously promoted and are currently on the market. Have a place on the table. In 2011, it is expected that there will be more new urea producers, more species and more output, which is expected to become a major highlight of the urea market. In addition, with the continuous development of BB fertilizer and the increase of mechanized fertilization, the processing and export situation is better, and large grain urea also has a certain market opportunity.
In 2011, transportation conditions are also expected to improve further. With the large-scale construction and opening of railways and highways, the transportation conditions have improved significantly. In addition to individual remote areas and individual time periods, the “transportation bottleneck†of the previous urea market has basically disappeared. In this way, there will be two major changes in the urea market: dealers will have to reduce urea production in advance because of concerns about transportation shortages, and they will need to purchase them now; they will avoid drastic reductions in urea shipments due to tight transport, which will lead to a substantial rise in urea prices. As a result, the market has become relatively stable.
In addition, the urea market in 2011 should also pay attention to several dynamics: First, urea is a high energy consumption industry, the main raw materials and costs come from coal, gas, electricity and other resources, resource price reform is worthy of attention; second is soil testing and fertilizer application promotion Implementation situation, the future direction is to reduce nitrogen and phosphorus control and potassium, soil testing and formula fertilization will reduce the amount of urea, its progress is worth attention; Third, urea enterprises operating rate changes should pay close attention, if the operating rate is too low, it is possible Lead to the domestic urea market in short supply; Fourth, the overall economic environment, the severity of China's economic inflation, will also have an impact on urea prices.