biggestlottery| Supply shrinkage and demand growth drive urea prices to fluctuate strongly: Henan Jinkai Yanhua Huaqiang Chemical Industry becomes a key variable

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Urea market has a strong trend in April.BiggestlotteryThe supply side is faced with shrinking expectationsBiggestlotteryThe demand for summer fertilizer is optimistic. The production of the new capacity lags behind, and the guarantee and supply depends on the high operating rate of the original equipment. The production of compound fertilizer is better than that of previous years, and the demand for urea is direct. Urea factory production and marketing pressure is not great, pre-received orders pick up, the spot market will continue to shock strong trend.

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[urea futures prices showed a strong trend, rising rapidly to more than 2100 yuan / ton in the middle of the month] Urea futures showed a strong overall performance in April and began to climb rapidly in the middle of the month after a brief shock at the beginning of the month. On the one hand, the market mood was too pessimistic after the start of spring farming, which led to an overfall in the market, and prices rebounded with the marginal improvement of supply and demand; on the other hand, the impact of export law inspection news also played a certain role in promoting prices. [the supply side is expected to shrink, and the planned commissioning of the urea plant in the first half of the year will be delayed] according to the production plan of the urea plant in 2024, a total of 11 units are scheduled to be put into production for the whole year, with a total capacity of 7.49 million tons, accounting for half of the production plans for the first half and the second half of the year. The total production capacity of the four units originally planned to be put into production in the first quarter is 2.8 million tons, but the actual production progress has been delayed. At present, the 800000-ton plant of Jinkai Yanhua in Henan Province and the 600000-ton plant of Huaqiang Chemical Industry are expected to be debugged and put into production from June to July. [domestic urea supply depends on the original plant to maintain high operating rate] due to the lag of the new production capacity, the domestic urea supply needs to rely on the original plant to maintain a high operating rate. The policy requires urea producers to keep running as much as possible, especially during the period of concentrated fertilizer use such as spring ploughing, and shall not be overhauled and shut down under special circumstances. However, with the end of spring ploughing and the beginning of summer fertilizer market, the demand for direct application of urea agriculture has entered a relatively off-season, and manufacturers began to concentrate on maintenance. According to public information, 10 enterprises are scheduled to be overhauled in May, affecting a total capacity of 7.17 million tons. [the demand for fertilizer in summer is optimistic, and the operating rate of compound fertilizer continues to rise] the seasonality of start-up of compound fertilizer this year is similar to that of last year, but after the market downturn around Spring Festival, summer fertilizer production is better than in previous years, mainly due to the support of raw material prices and the improvement of downstream orders. At present, compound fertilizer is in the peak period of high nitrogen fertilizer production in summer, and the operating rate has risen to more than 50%, 9 percentage points higher than that of the same period in previous years. Inventory of finished goods has increased from 75% in mid-AprilBiggestlottery.60,000 tons high down to 58Biggestlottery. 550000 tons, in the middle level, indicating that the production and marketing of compound fertilizer are booming. [inventory in urea plant declined, pre-received orders rebounded] inventory in urea plant fell to 502800 tons from about 750000 tons at the end of March, driven by marginal improvement in downstream industrial and agricultural demand. The demand for urea industry and agriculture increased during the spring ploughing period compared with the same period last year, which continued the trend of seasonal destocking and avoided the phenomenon of anti-seasonal accumulation last year. The pre-received orders of urea factories fell to the lowest level in the same period in mid-late March, but gradually recovered to the normal level under the support of actual demand. [urea factory production and marketing pressure is small, the spot market may continue to be tight] under the condition of low inventory pressure, due to the support of more orders to be issued, the production and marketing pressure of urea factory is relatively small. The production and sales rate of manufacturers has been maintained at more than 100% recently, and they tend to continue their price-raising operation. At the same time, due to the continued contraction of supply and demand, it is expected that the future spot market will be in a tight state, the disk may continue the shock trend under the support of actual supply and demand.