China's urea export tariffs into focus

In recent days, international urea prices have remained stable. There has been little change in spot urea prices in the Black Sea. Manufacturers have set the target FOB price for small-particle urea in August at US$850 and large-particle urea at US$900.

At present, the adjustment of China's urea export tariff has become the focus of attention. There are rumors that the Chinese government will adjust tariffs again (possibly sooner) starting October 1st, specifically 18% for January-September and 175 for the fourth quarter. % to execute. Recently, relevant parties in China are discussing the impact on the current market since the addition of 100% special export tariffs. After adding special tariffs, in June, China’s urea exports were 233,000 tons, which should be even lower in July and are estimated to be around 250,000 tons in August. It is estimated that China’s urea export volume in 2008 will be 5.2 million tons, which is lower than the 6.2 million tons in 2007. China's small urea export prices are FOB780 US dollars, large particles FOB850-860 US dollars. In addition, China's tariff increase will have a great impact on the supply of fertilizers in the northern hemisphere, which will place greater pressure on the agricultural economy and subsidies in the two high-priced markets of the United States and India. At the same time, the impact on several Latin American markets, such as Brazil and Argentina, is from August to September, and they will support spot demand more. The recent international trade will also be blocked. The current rapid rise in the prices of urea, energy, and pesticides has affected the U.S. agricultural economy.

However, during the Olympic Games, China controlled the production and transportation of 257 domestic products such as nitric acid, urea, ammonium nitrate, ammonia, and sulfur. Many of the fertilizer companies around Beijing also stopped production due to environmental issues. In addition, the mining and transportation of raw coal and sulfuric acid in Hebei, Shanxi, Shaanxi, and Shandong are all restricted, which will have a certain impact on the recent production of chemical fertilizers.

The recent price of urea that was sent to Brazil in Yuriyin is still the previous price, which is CFR850, equivalent to FOB780. The spot price is much higher than this, it is reported that the price of urea to be loaded in mid-September has reached FOB900. In August, Yuri is expected to export more than 200,000 tons of urea.

In the Baltic Sea, Russia has very little urea available for export in the near future. Currently quoted at FOB815-825 USD.

In the Middle East, the bidding price of 30,000 tons of urea for IPL in the Arabian Gulf a few days ago was FOB815. The further increase in demand for urea in India is inevitable. At present, MMTC is preparing for tender. In the first few days of IPL bidding, Qafco bid for 30,000 tons and the price is FOB815. In July, the domestic domestic urea sales volume was 1.9 million tons, which was far below the 2.8 million tons last year (mainly due to the increase in domestic stocks). As of the end of July, India’s urea stocks were 2.3 million tons, compared with 1.3 million tons in the same period last year.

In the future, the urea market will be stable and firm, and the sharp increase in China’s urea export tariffs is the biggest concern for the recent imports of urea from Brazil, Argentina, and Bangladesh. And for the Northern Hemisphere, inventory will remain low until the planting season of 2008-2009.