Last week, China’s urea market showed an upward trend. The average daily urea production increased slightly compared to the previous week. While regional agricultural demand for fertilizers persisted, industrial demand remained subdued due to high temperatures and humidity. However, supported by reduced production and increased exports, the sales performance of large-granule urea remained notably stronger than that of small-granule urea.
Market Performance
Overall, domestic urea prices rose last week, but a decline was observed in Northeast and Northwest China. In the Northeast, summer top-dressing fertilization had largely concluded, while Xinjiang saw ample supply and weak demand, leading to downward price pressure. By Friday, urea factory ex-works prices were as follows:
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Northern China: ￥1,780–1,820/ton
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Shanxi: As low as ￥1,640/ton
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Xinjiang: Dropped to ￥1,500–1,650/ton (local sales)
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Jiangsu & Anhui: Small-granule urea rose to ￥1,810–1,930/ton
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Guangdong & Guangxi: Market prices climbed to ￥1,850–1,930/ton
The mainstream wholesale urea prices nationwide mostly ranged between ￥1,800–1,900/ton.
Supply & Production
The average operating rate of urea plants stood at 83.4% last week, with daily output reaching 196,900 tons, up 1,900 tons week-on-week (WoW) and 16,900 tons year-on-year (YoY). As of July 11, the operating rate was 83.53%, with daily production at 197,100 tons.
Industrial Demand
Industrial demand remained sluggish due to high temperatures and humidity, which hampered operations in downstream sectors like plywood and melamine. The operating rate of compound fertilizer plants fell slightly by 0.25 percentage points WoW to 28.58%, though it was still 0.49 percentage points higher than the same period last year.
Agricultural Demand
Summer top-dressing in Northeast China has mostly ended, leading to a price decline. However, other northern regions saw rising prices due to ongoing fertilizer demand. The summer fertilization season is expected to conclude by late July, with the next demand peak likely in September–October.
Market Outlook
As summer fertilization nears completion and industrial demand remains weak, China’s urea market may face short-term downward pressure. Notably, a divergence between large- and small-granule urea is expected:
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Large-granule urea: Supply may tighten due to production cuts and export demand.
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Small-granule urea: Sales are likely to weaken as agricultural demand diminishes.
In summary, while urea prices have recently risen, the market is entering a phase of adjustment, with regional and product-specific variations shaping near-term trends. Export dynamics and industrial recovery will be key factors to monitor in the coming weeks.
Note: All prices are in RMB/ton (￥/吨).
