Coal prices fall again, urea takes another hit.

　　After the coal price fell and stabilized in the previous round, the urea market also stopped falling and stabilized, and even saw a slight rebound in some areas. However, in recent days, coal prices have fallen again. According to reports, on November 7, the Shanxi Provincial Energy Supply Coordination Group issued another coal price limit order, stating that it had received a price adjustment notice from the National Development and Reform Commission, requiring all state-owned coal enterprises in the province to reduce the pithead price of 5500 kcal market coal to 900 yuan/ton from November 8, further lowering the raw material costs for various fertilizer and chemical enterprises, including urea. This adds another blow to urea, in addition to supply and demand, causing domestic prices to fall successively.

　　Although some urea enterprises have outstanding orders to support their prices, the low-priced bargained goods from the previous sharp drop are circulating in the market, which to some extent has affected the current urea price execution and intensified the wait-and-see attitude of traders. Large traders’ slow progress in off-season stocking indicates a generally bearish view on urea, and some companies have begun to lower prices to attract orders. For example, the prevailing ex-factory Price of urea in Henan Province has fallen to around 2560-2675 yuan/ton. The reference value of the Price is not significant. The purchase Price of urea by compound fertilizer plants in Linyi, Shandong Province has fallen to 2540 yuan/ton. Although the operating rate of urea enterprises in Anhui Province has decreased, the ex-factory Price of urea has still fallen to around 2600-2665 yuan/ton, with negotiable room for transactions in various factories. In addition to the negative impact of the coal Price reduction on urea, the supply and demand of urea enterprises themselves is also critical.

　　On the one hand, the urea supply in the region has both increased and decreased, but the increase is larger.

　　Firstly, although the liquid ammonia Price is high, the recent decline is also significant. After all, only a few urea companies switch to producing liquid ammonia.

　　Secondly, with the recent increase in coal supply and sharp Price drop, the operating rate of coal-based urea enterprises has increased. For example, some urea enterprises in the Jin Cheng area of Shanxi Province and Henan Province are resuming production successively.

　　Thirdly, under the premise of ensuring supply and stabilizing Prices, urea exports are restricted after acceptance of the inspection. However, it is worth mentioning that according to the South Korean Ministry of Foreign Affairs, 18,700 tons of Chinese urea will enter the country to alleviate the emergency, and the Price is relatively high, which is a certain positive support for the domestic urea market. However, this is an individual case, and who exports it is also relatively restricted.

　　Fourthly, it is necessary to observe the operating status of gas-based urea enterprises. The annual gas restriction and shutdown are still the same this year. For example, some urea enterprises in the Sichuan-Chongqing region will recently shut down or reduce production. In summary, under the background of export restrictions and supply-side control policies, the overall supply of the urea market will show an upward trend in the short term, with daily production fluctuating around 138,000 tons, and there is also a risk of increasing inventory pressure.

　　On the other hand, demand is slow. In the agricultural sector, urea demand is in the off-season, mainly with scattered purchases, which lacks support for Prices. Frequent declines in urea Prices have led to slower procurement progress by large traders, and the off-season stocking time is likely to be delayed. In the industrial sector, although compound fertilizer enterprises have limited raw material urea stocking, their finished fertilizers have inventory pressure, and some are inventories from the previous high-priced raw materials. Sales are currently slow. The winter stocking Prices and policies for compound fertilizers are not completely clear, which has led to lower production enthusiasm and low willingness to receive raw materials. In addition, urea export restrictions have not reduced the domestic sales pressure.