Urea Price Likely to Pick Up in Late 2012 in China

By CnAgri2012-08-07 13:06:20 Print

The producer’s urea price was RMB2,050 ~ 2,100/MT in late July, down RMB50 ~ 150/MT from early July. BOABC predicts that urea price may experience an upturn in late 2012 for the following reasons:

First, urea exports are likely to pick up. India, a major buyer of Chinese urea, has set a low import price of $406/MT, frustrating Chinese urea producers’ zeal in urea exports. But considering the wide gap of 1.2 million MT in urea supply and demand in India, it is likely that India may raise its purchase price in the next few months.

Second, international grain and oil price is on the rise, conducive to the recovery of urea price.

Third, urea price may be brought up by a growing production cost. The urea price decline was partly attributed to coal price decline in the last few months. Since the government vows to stimulate economic growth with an active financial policy, coal and natural gas price is likely to enjoy an upturn, in turn propping up urea price.

From "China Fertilizer Market Weekly Report"