According to the Commodity Analysis System of Business Society, the mainstream domestic urea market prices increased significantly in July: urea prices increased from 2263.75 yuan/ton at the beginning of the month to 2622.86 yuan/ton at the end of the month, an increase of 15.86%. At the end of the month, prices increased by 9.65% year-on-year.

On July 30th, the urea commodity index was 121.26, unchanged from yesterday, a decrease of 20.40% from the cycle’s highest point of 152.33 points (2022-05-15), and an increase of 118.09% from the lowest point of 55.60 points on August 17th, 2016. (Note: The cycle refers to the period from September 1st, 2011 to the present)

From the supply side perspective, the mainstream domestic urea market prices increased significantly in July.

Cost side: Upstream market fluctuates with each other

The price of liquefied natural gas significantly decreased in July, dropping from 4296.00 yuan/ton at the beginning of the month to 3678.00 yuan/ton at the end of the month, a decrease of 14.39%, and a year-on-year decrease of 38.76% at the end of the month. The price of Yangquan Anthracite (washing in quick) rose sharply, from 920 yuan/ton at the beginning of the month to 1130 yuan/ton at the end of the month, an increase of 210 yuan/ton. The price of liquid ammonia has increased significantly, from 2700.00 yuan/ton at the beginning of the month to 3500.00 yuan/ton at the end of the month, an increase of 29.63%. The price at the end of the month decreased by 4.28% year-on-year. Overall, there has been a significant increase in upstream urea products, with good cost support.

On the demand side: The price of melamine has slightly increased

From the demand side, there is an increase in agricultural demand while industrial demand is average. The peak season for fertilizer use in summer has begun, leading to an increase in agricultural demand. The international urea market is on the rise, and India has released a new round of bidding, boosting industry sentiment. The operating rate of the compound fertilizer plant is average, and the enthusiasm for urea procurement is normal. Board and melamine enterprises generally start construction and mainly purchase on demand. The price of melamine increased slightly in July, from 6575.00 yuan/ton at the beginning of the month to 6875.00 yuan/ton at the end of the month, an increase of 4.56%. From a supply perspective, some enterprises have started to resume production, with daily urea production ranging from 160000 to 170000 tons.

Looking at the future market, the urea market may experience slight fluctuations and gains in mid to early August. The prices of Anthracite and liquid ammonia rose sharply, and the cost support was good. The daily production of urea is around 160000-170000 tons, and the supply is normal. Corn in the north and rice in the south have good fertilizer use, with increasing agricultural demand and industrial demand being the main demand. Urea may fluctuate slightly in the future.