Hebei Woldi Trading Co.,LTD
Compound Fertilizer, Monoammonium Phosphate, Potassium Chloride, Potassium Fertilizer, Potassium Sulfate
Yesterday, after nearly half a month of ups and downs, the price finally landed. There are a total of 23 bidders, with a total supply of 3.3825 million tons and a relatively sufficient supply of goods. The lowest CFR price on the East Coast is $396 per ton, while the lowest CFR price on the West Coast is $399 per ton.
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First, simply reverse the price in China, with a shipping cost of $16-17 per ton from China to the East Coast, excluding traders' profits, etc., and estimate FOB365-370 per ton in China (for reference only). To further calculate the domestic factory price, taking the Shandong region as an example, excluding port miscellaneous fees, shipping costs, and other expenses, it is estimated that the price does not exceed 200 yuan/ton, and the factory is approximately 2450-2500 yuan/ton. As of August 9th, the mainstream factory transactions in Shandong region were 2400-2490 yuan/ton, and the prices just covered this range.
But the price can not be said to be on par with the domestic market, but rather several rounds of bargain hunting since late July, most of which are below this price level, so it is also considered good news for the domestic market. So how should the domestic market develop next?
Figure 1 Urea Price Trend in Shandong Region
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Let's take a look at the number of winning bids first
According to statistics from various aspects of the market, the current supply of goods for printing labels in China ranges from three to five million tons to over 700000 tons. These quantities are either prepared by manufacturers, ports, social warehouses, or some empty orders. If all of them can go out, and even new procurement needs are needed, there will be new support for the domestic market before late September, in conjunction with other domestic advantages, and there will be a phased market trend. However, if the participation volume does not meet expectations, there may be a certain degree of bearish impact in the short term, after all, the current weak domestic fundamentals situation.
Waiting for more time to bring demand
Of course, the price tag is considerable, and a large number of domestic exports can be made. Overall, it is still good news. However, since the rumor of the label being printed in July, the positive effect has been largely absorbed. As export orders are gradually sold and waiting for shipment, domestic demand needs to take over next.
In terms of agriculture, there will be a small demand for fertilizer preparation in mainstream regions during the autumn fertilizer market from September to October. In terms of industry, with the end of high temperature and rainy weather in summer and the arrival of the Golden Age, the production of sheet metal will increase, and the demand for urea may also increase; Another major increase in industrial demand for compound fertilizers is the production peak period of at least one month in previous years. This year, due to the high risk and unstable trend of urea prices, the production of compound fertilizers has been delayed compared to previous years. Although urea has also been purchasing at low prices recently, the overall inventory of urea is still low. So as time passes and the seasonal cycle approaches, there is an expectation of increased demand for industry and agriculture, which will provide phased support for the market.
Figure 2: Trend of urea usage of composite fertilizers in some regional samples
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Always keep an eye on supply variables
Exports are considered to be coming to an end, and domestic demand still needs time to bring in, so it depends on the changes in supply. The continuous high prices have brought about ultra-high daily production operations, and many planned maintenance companies have repeatedly postponed maintenance times. As a result, daily production has been operating at over 170000 tons, which is higher than around 140000 tons in the same period, with a daily increase
Compound Fertilizer, Monoammonium Phosphate, Nitrogen Fertilizer, Phosphate Fertilizer, Potassium Chloride, Potassium Fertilizer, Potassium Sulfate
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