China’s urea prices to stay firm on strong demand

04 May 2012 11:51  [Source: ICIS news]

SINGAPORE (ICIS)--China’s urea prices have risen over the past few months and are expected to stay firm till July, boosted by strong demand and firm international prices, an industry source said on Friday.

Spot prices for urea were at yuan (CNY) 2,480-2,550/tonne ($390-400/tonne) EXW (ex-works) in east China on 3 May, compared with CNY2,100-2,220 EXW on 1 January, according to Chemease, an ICIS service in China.

Traders are likely to be building up stocks as they anticipate a shortfall between June and July when demand picks up traditionally from the agricultural sector, said a market player.

According to him, there are limited inventories in most parts of the country, after consumption in the agricultural sector peaked in end-March.

In addition, urea-based compound fertilizer producers are expected to continue to purchase urea during the production peak of April to May, a trader said.

Industry sources said market players are expecting domestic prices in China to be given a boost by firm international urea prices.  

Black Sea urea prices continue to rise, with export prices of urea in Yuzhny at $542/tonne, up from $515/tonne on 27 April, according to ICIS.

STC India will close a tender on 8 May for an unspecified volume of urea for shipment by 15 July and it is expected to raise international urea prices and domestic urea prices in China, along with another upcoming tender in Pakistan, a trader said.

“The domestic urea prices are expected to firm at high levels in the near term, with slight fluctuations predicted in some regions,” an industry source said.

($1 = CNY6.30)

Adele Zhu contributed to this report.

By: Nicole Zhang

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