Into October after the sharp decline in the amount of urea, which is still continuously increasing production, light storage issue has become a hot topic of urea market by manufacturers and distributors of high concern. Lower urea prices this year, dealers prefer to buy out the form of light storage.

Low risk reserve to withstand short Dan Chu

little risk of urea this year, mainly because of lower urea prices. Since the March decline since the mid-price of urea, urea market has been weakening of the middle with no rallies at all times, prices Crack 1,900 yuan (t value, the same below), 1,800 yuan, 1,700 yuan, 1,600 yuan, 1,500 yuan 5 pass, early in March with the price of 2,000 yuan when compared to the high points, down by more than 25%, decreased magnitude of the decline continued for a long time, rarely seen in history. Mostly currently offer urea factory 1450 to 1600 dollars, the wholesale market, mostly 1500 to 1700 yuan, the market retail price of most of the 1520 ~ 1800 yuan.

Current urea prices have fallen below a majority of the production costs of urea production, urea with gas companies and only a small part of the cost advantage of coal companies can profit the first urea, estimated that more than 60% of urea production enterprises are at a loss situation. Urea from the recent trend of situation, although from September 16 to October 31, urea export tariffs raised to 110% of the urea market is relatively large negative, but the price of urea and no major drop in Hunan Instead, the market price of urea occurred south 20 to 40 yuan rose slightly, indicating the price of urea is a record true to the point, the cost factors on the current price of urea has played a larger role in supporting. This can be seen from another point, ex-factory price of urea in 1450 to 1,500 yuan a with strong support, although the market in this price repeatedly, but it is difficult to below.

The form of increased buyout Dan Chu

urea There are three main ways: from storage manufacturers, dealers buy, manufacturers Fed. The first two methods are the risks and benefits of any, not the manufacturers assume that dealers take high risks, but the potential gains are large; after the way the benefits and risks by the manufacturers and distributors share the burden, that is, ” benefit-sharing, the responsibility for risk. ” As market uncertainty more urea, urea light stored in a certain degree of risk, many dealers and manufacturers are more favored in this way the Federal Reserve that it is a good form of risk reduction, so the Federal Reserve in recent years has been Dan Chu is the main form of urea.

However, for this year’s urea market, to buy the forms would be relatively more, but will replace the previous years, the Federal Reserve to become the mainstream form of short storage remains to be seen. The form of increased buyout this year there are two main reasons: First, the price of urea this year is low, some dealers feel that this short little risk reserve, buyout income is higher than the Federal Reserve earnings, and thus willing to buy. Moreover, some dealers see the manufacturer depression, fear factory can not guarantee the end to honor commitments, simply buy without any worries. Second, because the current low prices of urea, most of the urea manufacturers have been losing money, eager to sell as soon as possible of urea produced, the money back and to maintain simple reproduction, dealers are willing to buy what they wanted to do. Both have resulted in the required format will buy more this year.

The actual light from the current storage situation, there is also a manifestation of this. Overall, the present, most dealers are still cautious on the short storage, but a small part of the dealers in particular, some small dealers will dare to light storage, and basically buy. Some dealers even in August when the reservoir began to light, with the slow recovery of urea prices, dealers, many of them have begun to yield.