The production and sales of compound fertilizer are booming, and the demand for urea fertilizer is large in summer

Source: Huarong Rongda Futures Author: Huarong Rongda Futures

Text of research report

Market Trends

1. Many places in China urea The factory market continues to show an upward trend, the low-end transaction situation is good, and the regional high-end factory's new order transaction activity is not high for the time being. In terms of current market demand, in addition to the raw materials of compound fertilizer factories, agricultural dealers in Northeast China and North Jiangsu have also increased their enthusiasm for fertilizer preparation, which forms support for the price of regional factories. In the international market, the export situation of Egyptian urea has improved significantly recently, and the resources are mainly sold to the European market.

2. 282386 total positions of varieties, 2971 fewer; 45005 net long positions decreased by 445, and 65664 net short positions decreased by 325. 3034 warehouse receipts, a decrease of 30.

Fundamental Analysis

1. The coal price fell first and then rose during the year. Now it has returned to the price at the beginning of the year. The favorable factors still prevail. The coal price is still expected to rise before the summer peak.

2. The daily output decreased to 173500 tons, or to about 170000 tons at the lowest level, and gradually resumed production in early June. The operating rate of compound fertilizer has risen to a high level of 52% year on year. More than half of the production of high nitrogen fertilizer, raw material procurement takes 5-7 days as a cycle, and there are still 2-3 waves of raw material procurement needs; The progress of fertilizer preparation in summer is 3-4%, normal.

3. The mainstream logic of the bulls: the daily output is declining, the production and sales of compound fertilizer are booming, and the demand for fertilizer is large in summer. The mainstream logic of short position: Nissan is at a high level on a year-on-year basis, the load of compound fertilizer may peak and fall back, and the fertilizer reserve will enter a gap period during the wheat harvest.

[Strategy Suggestions]

1. Direction: see more

2. Strategy: 09 unilateral bargain hunting

3. Core logic

1) This overhaul involves large capacity, long time, and most of the devices are in the main production and marketing areas

2) Compound fertilizer and high nitrogen fertilizer production can last until the first ten days of June

3) There is still a big gap in fertilizer in summer

4. Risk warning

Ensure supply by policy and resume production in advance

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