Influence of Increasing Natural Gas Price on Urea Market

By CnAgri2013-07-09 11:09:45 Print To ensure natural gas supply and promote energy-saving and pollution-reduction, the State Development Commission has decided to raise non-household-use natural gas price from July 10 on. The price of natural gas supplied to fertilizer plants will be raised by RMB0.25/cubic meter.
 
30% of urea is based on natural gas presently. Each ton of urea costs 700 cubic meters of natural gas. The gas price increase is likely to cause urea production cost to go up RMB175/MT to a level of RMB1,800/MT. Gas-based urea producers are presumed to be in the red in the future.
 
Urea market is ruled by a surplus at home currently. Though low-tax season starts on July 1 for urea exports, soft international demand is unlikely to prop up Chinese urea market price.

From “China Fertilizer Market Weekly Report”