Urea International: the price will ease when the market is depressed

Urea International: the price will ease when the market is depressed

Source: Zhongyu information time:  September 11, 2020

executive summary

Prices will ease when the market is depressed

Urea prices fell in a slow trading week. As India did not buy, major western market activities continued to be depressed and prices lacked sufficient support. Egypt’s crude oil price fell to a low of 265 US dollars / ton, the black sea level fell to 250 US dollars / ton, and China’s crude oil price fell slightly to about 260 US dollars / ton.

Despite the price drop, suppliers are reluctant to significantly reduce their quotation because many suppliers are in a favorable position after the recent large sales to India. In addition, they are well aware that another bid will be announced soon, possibly as early as next week.

India still needs to buy heavily until January, while Brazil and Europe should increase their purchases later this month. This shows that the current price weakness may be short-lived, and its duration will depend on the timing of Indian bidding.

Market driven

China

Suppliers show a strong desire to export to India. Now, the shortage of logistics is coming one after another, which may become an obstacle to the next round of bidding.

India

As of September, China’s domestic auto sales remained stable, but still far higher than the same period last year. This will keep Rabi’s large imports until January next year.

Egypt

The supplier reduced the quotation to attract European buyers. However, in order to encourage active replenishment of inventories, it may need to fall further.

30-60 DAY outlook

Stable to slightly weak

Prices may continue to fluctuate until India starts buying again.

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