In the first half of this year, the urea market showed a trend of low, high, and substantial volatility. After May, the strong market characteristics were one of the strongest periods since 2009, which is in stark contrast to the sluggish trend in the first half of last year. In the second half of this year, the urea market will continue to operate at high levels, but it will be difficult to continue the continuous rise of the urea market. Specifically, it will be affected by the following factors:

——The price of raw materials is high in raw coal, and the current price of pits in Shanxi's smoke-free lump coal is between 995 and 1,140 yuan (ton price, the same below), of which the price for smoke-free middle block in Jincheng is 1,140 yuan; In the range of 750 to 835 yuan; Henan smokeless lump coal car plate price in 1350 to 1480 yuan; Ningxia smokeless lump coal car plate price in 1100 to 1130 yuan. Compared with the same period of last year, the increase rate was 20% to 40%. However, since March this year, the price of anthracite lump has been relatively stable and has not continued to rise sharply. It is expected that coal prices will continue to be dominated by high stability in the second half of the year and the fluctuation will not be too great. In terms of electricity prices, the prices of electricity in 15 provinces and cities, such as Shandong, Shanxi and Henan, rose by 1.67 points per kilowatt-hour on June 1. The urea output of these 15 provinces and cities accounted for 74.34% of the total urea production in the country, which is equivalent to an increase of about 12 yuan in urea costs nationwide. Due to the high raw material prices and the increase in workers' wages, the current cost of urea enterprises in China is generally above 1800 yuan, which is higher than 2,000 yuan.

-- International urea prices are on the rise After domestic urea prices rose sharply after May, one of the incentives was the sharp increase in international urea prices. In February of this year, the international urea price was at a low point. At that time, the price in the Baltic region was around US$300. At present, international urea prices have generally risen above US$500, equivalent to RMB3,250. From July 1 to October 30, China will enter a four-month off-season urea tariff period. If the export price is below the benchmark price of 2,100 yuan, an export tariff of 7% will be imposed, and if it exceeds 2,100 yuan, a floating tariff will be imposed. The sharp rise in international urea prices is very beneficial to China's urea exports, which not only leads to an increase in exports, but also will increase domestic urea prices.

- Good demand for compound fertilizer and industrial urea In the first half of this year, the demand for agricultural urea was dull, but industrial fertilizers were in demand. The export volume of binary compound fertilizers increased greatly, coupled with the good market demand for domestic compound fertilizers and a higher operating rate. The demand of compound fertilizer manufacturers for urea increased significantly and became a direct contributor to the early rise in urea prices. It is reported that in May, some urea manufacturers in Shandong made 80% to 90% of their goods are industrial fertilizers. The use of compound fertilizer in fertilizers in the fall is large, and it is expected that a new round of fertilizer manufacturers will purchase urea after August. In addition, melamine, wood-based panels and other industries have had relatively strong demand for industrial urea this year, which has also contributed to higher urea prices.

- Production may become positive growth Last May was a turning point in China's urea market, from the past output growth to production decline, this decline has continued until April this year. However, this decline was reversed in May this year, when the monthly production of urea was 5.265 million tons, a year-on-year increase of 4.4%, and a growth of 7.4% from the previous month, which was the highest rate of increase since January of last year. The urea utilization rate is expected to continue to rise in the second half of this year, and urea production is likely to change from negative growth to positive growth.

- Farmers' income from planting is reduced This year, the purchase prices of agricultural products have risen by 15% in addition to the price of corn, and the purchase prices of white wheat, red wheat, mixed wheat, and early rice have risen below 10%. The cost of growing grain has increased by 20% to 30%, so the income of grain farmers this year has actually declined. The same situation exists in the international market. Except that the increase in corn price was higher than the increase in urea price, the prices of rice, soybeans, cotton, wheat, sugar, soybean oil and palm oil in other agricultural products were all lower than those of urea. If the analysis is based on the factors of farmer planting income, whether it is the domestic urea market or the international urea market, the situation is not optimistic and the price is high. In addition, changes in the planting structure of farmers also deserve close attention. For example, because the benefits of planting corn are significantly better than soybeans, some places have increased corn planting area this year and reduced soybean planting area. This change will lead to changes in the structure of fertilizer demand.

——New urea is getting better and better The new urea such as peptide urea, double enzyme urea, urea urea, humic acid urea, and sulfur-coated controlled-release urea have become a major highlight of the market. The new urea has not only sustained-release, controlled-release Characteristics, the effective utilization rate increased from about 30% to 42%, and successfully solved the soil consolidation problems caused by long-term use of urea, so that the soil organic matter activity and productivity have been significantly improved, but also can effectively activate the absorption of nitrogen in crops, 20% increase in fertilizer efficiency and 30% increase in vegetable yield. At the same time, the quality of vegetables and fruits has been greatly improved. After years of promotion, the new urea is now getting better, because the profit is higher than ordinary urea, the manufacturer is willing to produce more, dealers are willing to distribute more, at the same time due to high fertilizer utilization, high fertilizer efficiency, but also welcomed by farmers, as a manufacturer , businesses, farmers three good income products.

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