In the past two years, food prices have risen, not only because of macroeconomic factors, but also because of the conflict between Russia and Ukraine. At the same time, an important reason is the sharp increase in planting costs.
Especially corn, wheat and other crops, the demand for chemical fertilizers is relatively large, so in addition to food prices and pig prices, the price trend of chemical fertilizers is also highly collected.
In the fertilizer market, urea price is regarded as the weather vane of the market. Many farmers believe that once the price of urea is unstable, it means that the whole fertilizer market will fluctuate.
Urea, for example, fluctuated greatly last year.
In the first half of last year, the trend of urea hit record highs, once hitting a high of 3200-3300 yuan/ton. In the middle of the year, he suddenly fell off the cliff, but in the second half of the year, he began to climb up in small steps.
There are many reasons for the surge in urea last year:
First, supply and demand drive.
Urea consumption is dominated by agricultural demand, with obvious seasonal demand. But in fact, the supply of urea increased significantly last year, and the inventory of enterprises was high. However, due to the epidemic last year and poor transportation, the actual supply is very limited.
Second, the cost support is strong.
Coal, natural gas and other important raw materials for fertilizer production have risen sharply, which directly increases the production cost of urea.
Last year, the price of urea was embarrassing, but on the first day after the festival this year, domestic urea prices generally rose slightly. When everyone is worried about whether urea will return to the old road of last year, many institutions have analyzed that urea is weak this year, and even in the peak season, it is difficult to reproduce the strong trend of last year.
So, is this really the case?
First of all, from the perspective of supply and demand, spring ploughing is going on, and the peak season of agricultural demand is coming, but the industrial demand is weak and the supply level remains high.
From the perspective of supply, the loose supply situation at the end of 2022 is still continuing.
On the one hand, production capacity and utilization rate have improved.
In 2023, the urea industry has a large number of new capacity plans.
According to statistics, the total production capacity of planned urea projects has reached 4.66 million tons, and the planned projects under construction have reached 5.56 million tons, adding up to 6.5438+0.022 million tons.
In 2022, the utilization rate of urea capacity increased by 2.32 percentage points year-on-year, and this trend will continue in 2023.
The improvement of capacity utilization and output laid the foundation for urea supply.
In addition, with the enterprises returning to work one after another after the year, it is estimated that the daily output of urea will rise to more than 6,543,800 tons in February, which also ensures the supply of production capacity.
On the demand side, the demand for urea is mainly agricultural demand, accounting for about 50% to 60% of the total consumption, and the rest is industrial demand such as compound fertilizer, melamine, wood-based panels and urea for vehicles.
Agricultural demand has obvious seasonality and stages. Spring ploughing usually begins after beginning of spring every year, and this time is also the period with the largest amount of urea fertilizer.
In the past two years, with the recovery of grain prices and planting area, agricultural demand has increased slightly, which is just needed.
On the other hand, the industrial demand is relatively weak, mainly due to the marginal improvement of macro-economy, and the cyclical demand related to real estate such as melamine and wood-based panels maintains a weak recovery trend, so the overall support is not strong.
Second, the cost support is weakened and the fluctuation of urea price is narrowed.
On the other hand, the prices of coal and natural gas have also returned to a stable level.
Especially in the context of the country's efforts to ensure supply and stabilize prices, the volatility of coal prices has been greatly weakened.
On June 5438+ 10, the coal price was about 1200 yuan/ton, which was basically the same after the holiday.
Later, as the weather gets warmer, there is still room for falling back.
The decrease in cost means that the profits of urea enterprises increase, so the enthusiasm of spring ploughing production is improved, which is also conducive to supply security.
Third, the recovery of exports will not last beyond the second half of the year.
202 1 10, the national inspection method for fertilizer export was changed from commodity inspection to legal inspection.
Since then, China's urea export volume has dropped sharply, and China's urea export volume dropped sharply last year.
At present, the implementation cycle of legal inspection is until April 30 this year, and the market also speculates that urea exports will return to normal after that, but the calculation time is also in the second half of the year, and the support for the peak season of agricultural demand in the first half of the year is relatively limited.
Therefore, from this perspective, the chance of urea price fluctuation in 2023 is weaker than that in 2022, but it does not mean that urea will return to normal, because the bottom support is still strong due to agricultural demand, but the kinetic energy at the high point is obviously insufficient, so it is difficult to break through last year's high point.
In the second half of the year, as demand decreases and supply is high, it may usher in a decline.