Urea Prices Decline Marginally, Consumers Can Expect Further Ease in Short Term

Hubei, China: Urea prices tracked by ChemAnalyst have cooled off a bit since the beginning of May, on the back of increased supplies. As Natural gas and Nitrogen prices plunged, so did fertiliser prices, which reported small price drops.

Fertilisers have seen a dramatic decrease in price in the international market. New advance order prices fell by roughly 30% in June compared to May, but the current worldwide Urea market price is still about 87 % higher than at the same time last year.

Furthermore, the crisis between Russia and Ukraine is far from ended, and the global supply chain shortfall will continue to affect the global fertilizer industry. China's supply of exports in India's most recent round of bidding is estimated to be around 300,000 tons.

However, Urea exports may rise modestly in the short term. Nevertheless, the likelihood of a significant increase in exports is still modest under the current inspection process.

This month, the Urea industry's average operating rate fell by 1.15%, to 73.81%. The operational rate of gas-head industries has improved dramatically this month, rising from 7.04% age points to 68.56%, but the present absolute level is still low compared to last year.

Upstream Coal head enterprises' operating rate dropped 3.94% to 75.60%. In May, the total level of Urea production varied slightly, although the daily output trended downward from a high point. China's average daily Urea output was 155,000 tonnes on May 27, down 5.95% from April.

In May, the inventory of Urea enterprises continued the downward trend, but bounced back slightly at the end of the month. Domestic Urea firms had 215,000 tonnes of inventories as of May 26, down roughly 35% from April, and the absolute amount had also plummeted to the second lowest in recent years.

As per the ChemAnalyst “There is potential for a further drop in domestic Urea market supply in June, but the release of summer tube fertilizer may compensate for the loss of supply caused by the reduction in some production levels, so the overall supply of Urea is unlikely to drop much, but caution should be used.”