News from Business Agency on May 15
Last trading day, urea The main contract closed up 0.28%, and the Linyi market in Shandong Province was 2380 (+30) yuan/ton, narrowing the basis. Last week, the market fluctuated. First, the recent property policy promoted the logic of the recovery of industrial demand for plates. Second, the agricultural demand itself is also in the peak consumption season, and the short-term demand for high nitrogen fertilizer is expected to be maintained. Two risks need to be noted in the follow-up of multiple orders. First, the risk of accumulation after the compound fertilizer starts to decline after the daily output rebounds to around 190000 tons. Second, the actual recovery of industrial demand. The short-term market may maintain strong shocks, The short-term daily output fell below 180000 tons, and the market may continue to fluctuate.
On the supply side, the daily production pace may be low first and then rise again. The number of early maintenance enterprises increases, and the daily production may gradually decline in the middle of the month. Near the end of the month, the early shutdown enterprises have recovered in succession, and there are not many planned maintenance enterprises. The daily urea production has risen to a narrow range of more than 185000 tons.
On the demand side, in terms of agricultural demand, May was the time when fertilizer was used for rice in the south. Fertilizer use in rice regions was relatively decentralized, and fertilizer use was not released in a centralized manner for the time being, which has relatively limited support for the overall market demand. In industry, the compound fertilizer market has fully entered the summer market. In the demand season of high nitrogen compound fertilizer, there is still some expectation of urea consumption, but it will start in the last ten days of this month or slightly decline. In the plate industry, downstream operators basically maintain the rigid demand procurement mode. Therefore, on the whole, the production of high nitrogen compound fertilizer in summer is the main source of urea demand after the festival, and the demand for urea in the first ten days of May is still supported.
As of May 8, 2024, the total inventory of Chinese urea enterprises is 502800 tons, a decrease of 5500 tons compared with last week, and a decrease of 1.08% month on month.
Viewpoint: shock treatment is recommended.
(Source: Southwest Futures)
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