SunSirs: Urea Prices Hold Firm with Highest Increase Reaching RMB 170 per Ton

According to China Chemical News, the current domestic urea market in China is showing a notably firm trend.

Prices Keep Climbing

After the National Day holiday, two weeks of persistent rainy weather delayed the autumn fertilizer market, intensifying pessimism in the urea market and driving prices to their lowest level of the year. Although prices began to climb from the bottom afterward, they remained weak and sluggish, with subsequent guidance prices seeming unattainable.

Since November, however, prices have climbed steadily driven by multiple factors. As of now, ex-factory prices in major regions have mostly surpassed 1,600 yuan (per ton, same below), marking increases of 130–170 yuan compared to the post-National Day low (excluding large-grain urea). The price floor has clearly been raised.

Mindset Shapes the Rhythm

While multiple factors influence price movements, shifts in market sentiment likely play a key role. Apparent demand in Q3 this year appeared weaker than in previous years, possibly because downstream buyers, facing robust supply capacity and lacking export support, showed no urgency to enter the market. Now, unexpected fourth-batch export quotas, relatively low prices among major fertilizers, and time-driven stockpiling demand have shifted market sentiment. Apparent demand has gradually outpaced previous years, and corporate inventory levels have declined for several consecutive weeks.

Supply Remains Pressured

However, risks persist. Years of new capacity additions, compounded by this year's plant upgrades in Jincheng, make it difficult for daily urea production to drop to previous lows. Recently, some gas-based plants have shut down for maintenance, gradually reducing daily output. Combined with short-term operational disruptions, the decline has been less than anticipated. However, once disrupted plants resume operations, daily output may rebound to fluctuate between 195,000 and 200,000 tons—still 10,000 to 20,000 tons higher than the historical average for this period. Moreover, the trend of ample supply is expected to persist, with new capacity set to come online in the first half of next year.

Therefore, overall, as price levels continue to rise, the upside potential may narrow. Nevertheless, driven by factors such as stockpiling expectations and export demand, the short-term urea market remains in a relatively strong trend. In the medium term, the outlook hinges on the implementation of subsequent export policies, as current developments primarily involve shifting supply rather than actual absorption.

As an integrated internet platform providing benchmark prices, on December 4th, the benchmark price of urea from SunSirs was 1700.00 RMB/ton, an increase of 2.56% compared to the beginning of the month (1657.50 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).

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