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Urea price is affected by energy, policy and demand cycle, the current market is similar to 2013, coal supply and demand changes, urea capacity expansion, demand decline, but short-term policy and geopolitical factors bring uncertainty, prices are expected to fall.
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Urea price fluctuation is closely related to the energy market. Short-term market fluctuations need to pay attention to policy changes. Urea as an important agricultural fertilizer, its price fluctuation is not only affected by the agricultural production cycle, but also closely related to the energy market. According to the analysis of Zijin Tianfeng Futures Research Institute, the price fluctuation of urea is mainly affected by energy cycle, capacity cycle, policy cycle and demand cycle.
The large cycle fluctuation of urea price is basically consistent with the energy price. From the historical point of view, the large cycle fluctuation of urea price is basically consistent with the energy price. In 2013, coal supply and demand changed from tight to loose, price shocks fell, while urea capacity was still expanding, corn and wheat prices fell high on the demand side, and export policy was gradually relaxed. At present, the urea market is in a stage similar to that in 2013, and prices are expected to fall.
The long-term history of urea prices going through four stages of sharp rise shows that in the past ten years, urea prices have experienced four stages of sharp rise: from October 2007 to August 2008, from August 2010 to July 2012, from August 2016 to October 2018 and from August 2020 to the present. The increases in these stages are related to fluctuations in energy prices.
Urea price fluctuations are affected by policy changes and geopolitics. Urea price fluctuations are affected not only by supply and demand, but also by policy changes and geopolitics. For example, after October 2007, the macro-economy was overheated and energy prices were high, resulting in a rise in urea prices. In the autumn of 2010, coal prices rebounded rapidly, urea production was limited, and prices rose again.
At present, urea production capacity is still in the expansion stage, and the export policy is gradually relaxed due to the fall in prices. In the long run, urea prices are expected to fall, but short-term market fluctuations need to pay attention to policy changes, urea non-agricultural demand and geopolitical uncertainty.
The fluctuation of coal price is the key factor affecting the price of urea. The raw materials of urea are mainly coal and natural gas, of which coal is888starzcasinoThe main raw materials for urea production in China. The fluctuation of coal price directly affects the production cost of urea, and then affects the price of urea. From the perspective of historical data, the rising cycle of urea prices corresponds to the cycle of sharp increases in coal prices.
The impact of policy cycle on urea price can not be ignored. The impact of policy cycle on urea price is equally important. For example, in August 2010, urea prices rose due to insufficient supplies of natural gas and tight supplies of coal and electricity. Before 2017, the relevant regulation and control policies of urea export were mainly tariff adjustment, and the adjustment of export tariff directly affected the export volume and domestic supply of urea.
The influence of demand cycle change on urea price is becoming more and more significant in recent years. With the change of agricultural production mode and the fluctuation of grain price, the influence of demand cycle change on urea price is becoming more and more significant. For example, since 2020, affected by the epidemic, climate and geographical situation, food prices at home and abroad have risen significantly, and the demand for urea and other chemical fertilizers has increased year after year.
The relationship between supply and demand is still the main factor affecting urea price, although policy and geopolitics have an important impact on urea price, the relationship between supply and demand is still the main factor affecting urea price. When there is an oversupply of urea, prices fall; when demand grows faster than supply, prices rise. Therefore, investors should pay close attention to the changes in supply and demand of urea.