According to the Agricultural Inputs Guide of China Chemical Industry News, the 25th Phosphate and Compound Fertilizer Production and Sales Conference, jointly hosted by the China Phosphate and Compound Fertilizer Industry Association and the China Agricultural Inputs Circulation Association on November 6, analyzed changes in global and domestic fertilizer market supply and demand to guide the healthy development of the domestic industry.

The conference indicated that global urea production capacity continues to expand, with prices potentially bottoming out and rebounding by 2026.

Currently, there are 450 urea producers worldwide with a total capacity of 240 million tons, while annual demand stands at approximately 185 million tons. Global urea capacity is projected to increase by 4.41 million tons in 2025, representing a 3.48% year-on-year growth. Key expansion drivers include Russia (1.085 million tons), Iran (1.855 million tons), and India (1.27 million tons).

Trade-wise, global urea trade volume reached 54.7 million tons in 2024, with India, Brazil, the United States, and Australia as major importers. Brazil imported 8.6 million tons, while India imported 5.3 million tons. Price trends in 2025 showed significant volatility in the international market. Driven by demand from South Asia and the Americas, prices in the Middle East rose by 20% from the beginning of the year to mid-February. In Europe, prices remained at elevated levels due to seasonal agricultural demand.

In May, China's export policy implementation further elevated market quotations. From June to August, India's frequent tenders also drove prices higher.

In August, Indian tender prices briefly exceeded $500 per ton.

From September to October, as India's tendering activity slowed, prices began a gradual decline. Notably, India's domestic production capacity has risen to approximately 30 million tons, yet it still faces an import gap of 2 to 3 million tons.

The domestic urea market maintained overall supply-demand balance. Sustained growth in grain production provided demand support, with China's grain output remaining stable above 1.3 trillion jin for nine consecutive years and exceeding 1.4 trillion jin in 2024. The 2.2% increase in sown area over the past five years is projected to boost fertilizer demand by 7.7 million tons. According to the China Nitrogen Fertilizer Industry Association,

China's urea production capacity is projected to reach 75 million tons by 2025, approaching the historical peak recorded in 2015. From January to September, urea output reached 54.21 million tons, an increase of 4.57 million tons year-on-year. Annual production is expected to hit 72 million tons, with consumption estimated at approximately 65.5 million tons. Agricultural consumption accounts for 42 million tons, while industrial consumption stands at 23.5 million tons, indicating a surplus in supply and demand.

Regarding exports, China implemented a dynamic guidance policy for domestic urea exports in 2025. The first three batches of planned exports totaled 4.2 million tons. Cumulative exports from January to September reached 2.8 million tons, a year-on-year increase of 2.56 million tons. Annual exports are projected to be around 5 million tons. Regarding pricing, the average domestic urea ex-factory price from January to September 2025 stood at RMB 1,731 , down 18.5% year-on-year, with actual enterprise selling prices falling by approximately RMB400. Cost dynamics showed divergence: delivered prices for anthracite and bituminous coal decreased by RMB167  and RMB137  year-on-year respectively, thereby reducing urea production costs. Conversely, natural gas delivery prices rose year-on-year, increasing cost pressures for some gas-based urea producers.

Overall, China's urea market will face multiple changes in 2026. Structural capacity imbalances will persist: 6.6 million tons of new and replacement capacity were added in 2025, with an additional 5 million tons expected in 2026. Industry operating rates will remain high, with daily output stabilizing around 200,000 tons. High-cost production capacity is expected to gradually exit the market, while low-cost capacity continues to supplement, driving optimization of the industry's capacity structure.

Regarding pricing, current urea prices are already at relatively low levels, with some gas-based producers' selling prices approaching their costs. As cost support strengthens and expanding industry losses force capacity rationalization, prices are projected to rebound, potentially by around RMB100. However, the rebound's scope will be limited by dynamic export policy adjustments and ample production capacity.

On the demand side, agricultural demand faces uncertainty due to grain price fluctuations, while industrial demand remains stable. Overall supply-demand dynamics will continue to dictate market trends.

In summary, the urea market is undergoing a bottoming-out adjustment phase. Future recovery will unfold amid policy adjustments, cost fluctuations, and supply-demand dynamics, with industry concentration expected to further increase.

As an integrated internet platform providing benchmark prices, on November 11, the benchmark price of urea from SunSirs was 1627.50 RMB/ton, an increase of 1.24% compared with the beginning of the month (1607.50 RMB /ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.