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In the international market, high prices have boosted the demand in the international market. At the same time as the developed countries have restricted the development of heavy chemical industry, the output of urea has decreased, and some exporting countries have even become importing countries. This, together with the significant increase in international urea prices since the beginning of the year, has stimulated The rise in domestic urea prices and the increase in exports.
At present, the FOB price in the Asian urea international market is between US$350 and US$370 (t price, the same below), while China’s urea FOB price is only US$300 to US$302. The price difference between China’s urea and the international market is relatively large. The large profit-making space has become a powerful driving force for domestic companies to actively organize inland urea exports. From October 1, the state adjusted the taxation rate of urea exports from the original 30% to 15%, which gave some benefits to the domestic urea export profits, further stimulated export behavior, and the domestic manufacturers’ export enthusiasm increased. It has aggravated the imbalance in supply and demand in the domestic market.
In September, total domestic urea production was 3.069 million tons, and exports were 252,400 tons, accounting for 9% of total domestic resources. In October, total domestic urea production was 216.28 million tons, and exports were 0.454%, accounting for 22% of total domestic resources. From January to October, the total domestic urea production was 20,608,300 tons and the export was 2,811,800 tons, accounting for 0.14% of the total domestic resources. From January to October last year, the total domestic urea production was 18,219,500 tons, and the export was 804,800 tons, which accounted for only 0.05% of the total domestic resources.
The production cost has formed support Since the beginning of winter, the price of coal, natural gas and crude oil has risen again, causing increased pressure on the cost of urea production enterprises. This is also an important reason supporting the continued rise in urea prices.
According to statistics, the average production cost of coal-headed urea enterprises in China last year was about 1,360 yuan, and this year's cost increased to about 1,500 to 1,600 yuan. At present, when the northern region enters the heating period, the demand for coal has soared, and coal prices in Shanxi and other places have risen sharply. The pressure on the cost of coal urea production enterprises has increased.
The National Development and Reform Commission recently issued a “Circular on Adjustment of Natural Gas Prices†to increase the price of some natural gas. Although the use of gas by urea producers is not in the price increase range, it is due to the low price of gas used by urea companies. For their own interests, they are reluctant to give more gas to the urea companies that enjoy the policies, resulting in a serious shortage of air supply for the urea-producing gas companies, reducing the production load, and limiting production.
On November 1st, the National Development and Reform Commission raised the ex-factory price and retail medium price of domestic refined oil by 500 yuan, which will undoubtedly shift the new energy costs of the company downstream, and further raise the price of products. At present, international oil prices continue to remain high, and the tight domestic refined oil resources situation has not yet been improved. The urea enterprises' production of necessary energy, power, and raw materials for the oil-headed urea enterprises have thus been significantly affected.
In addition, transportation costs have also increased. The rise in various freight rates will not only increase the transportation costs, water transport, and iron and freight costs of urea products, but also affect the transportation costs of various raw materials such as coal and timber for urea production, which will have a huge impact on companies. It is worth mentioning that the recent unfavorable transportation of railways and highways has caused local market shortages.
Insufficient demand for underemployment In recent days, some manufacturers have started underemployed. The 1 million-ton-class Deqilong urea plant with coal as raw material is currently under full-line parking inspection. The 520,000-tonne Anqing Petrochemical Company has been parking for two and a half months. Sinopec Baling Petrochemical has not been driving; the China National Offshore Petrochemicals, which used natural gas as raw material, was closed recently. In the 800,000-ton urea plant and 600,000-ton methanol plant in the south of Hainan Province, the second 520,000-ton urea plant in Hainan Fudao was overhauled. The driving time was undecided. Zhongyuan Dahua had insufficient natural gas supply and the production load was only 60. %.
At the same time, downstream demand is very strong. According to the statistics of the Ministry of Agriculture, the price of agricultural products in China continues to rise this year, and the amount of chemical fertilizers continues to increase. Industrial urea downstream melamine market trend is good, manufacturers sell smoothly, basically no inventory, prices have also continued to rise. At present, the melamine ex-factory price has exceeded 9,000 yuan, the market price is 9600 to 10,500 yuan, the high reached 11,000 yuan. Compared with late September, it rose by 1,000 to 1,500 yuan, the largest increase since the beginning of this year. The market efficiency of ADC foaming agent, another downstream product of industrial urea, is also very good. Affected by rising raw materials and increased investment in environmental protection, the domestic market price of ADC foaming agent has risen by RMB 500. The new export price is also Not less than $2,000.
In addition, in the summer when the market is not booming this year, the China Nitrogen Fertilizer Association has organized an emergency meeting for enterprises that account for more than 70% of the urea production capacity. It discussed the restrictions on production, market stability, light storage, and tariffs, and proposed different aspects. The solution to the dilemma of the off-season and at the same time it called on the urea production companies to limit production and insured prices also played an important role in the rise in urea prices. The compensatory growth after the crash is also one of the reasons. The urea market in June-August 2007 was extremely abnormal. In the busy season, not only was the sales not booming but it was plunged. After a slump, there must be skyrocketing growth. This is also due to market rules. Recently, the prices of phosphate fertilizers, potash fertilizers, and compound fertilizers have reached the highest point in history. Urea has become a focus of fertilizers for some distributors, and price increases are inevitable. 
How does the price of urea soar at the end of the year?
Every year from October to November, autumn sowing across the country has basically ended, but the winter storage has not yet started on a large scale. The fertilizer market should have been in the off-season. However, this year's domestic fertilizer market is not only weak in the off-season, but also the price continues to soar and the power is strong. In particular, urea is gaining momentum and rising rapidly, which is rare in history (see the figure below). What caused the domestic urea market to not be slack in the off-season, and the price continues to soar, and its power is strong?