In 2023, the urea market will show the characteristics of “steady and weak demand, stable and downward price, and high supply”. In the first half of 2022, the urea market first rose and then fell, and the price fell sharply at the end of September. Overall, the profitability of urea enterprises has declined. From January to September 2022, the cumulative domestic export of urea was 1.367 million tons, a year-on-year increase of 26.09%. It is expected that domestic urea production will maintain a relatively high level in the first quarter of 2023; demand may gradually weaken in the fourth quarter; exports will increase significantly in the second half of 2022 or continue to the second half of 2023.
1. Urea production capacity and output
As of the end of September 2022, my country’s urea production capacity is about 426 million tons, and it is expected that the domestic urea production capacity will grow by about 3% in 2023. From the domestic situation, the national urea output from January to September 2022 will be 29.61 million tons (excluding the output of long-term shutdown and maintenance), a year-on-year increase of 10.4%. From a regional perspective, domestic urea production will show a trend of “expanding south and moving north” from January to June 2022. In terms of provinces: From January to March 2022, the urea production in Shandong, Henan, Jiangsu, and Hebei was 1.178 million tons, 1.154 million tons, 875,000 tons, and 697,000 tons, respectively; It is 605,500 tons (excluding the output of long-term parking), and 682,000 tons; Shandong urea production enterprises have gradually resumed and increased production since May. In terms of regions: urea production in the northern region is dominated by “expansion to the north and movement to the south”. From January to June 2022, the production volumes of Jincheng in Shanxi and Ordos in Inner Mongolia will be 0.91 million tons and 1.04 million tons respectively, accounting for 26.2% and 1.04 million tons of the country’s total production capacity. 22.5%. In terms of enterprises: From the perspective of enterprise distribution: in the first three quarters of 2022, production in Shandong and Lubei accounted for a large proportion (34.3%); production enterprises in Yulin, Shaanxi and Ordos, Inner Mongolia were more (19.6%), and other regions accounted for less ( 12.8%); while the production capacity of urea production enterprises in Shanxi Jincheng and Inner Mongolia Ordos is relatively low (11.1%).
2. Demand for urea
Urea is a typical agricultural fertilizer. It has a wide range of uses and is mainly used in agricultural fields: such as increasing grain production and agricultural chemical fertilizers. (1) Industrial demand: For civil use, urea is one of the main raw materials for civil use, and its output accounts for about 50% of the output of compound fertilizer. (2) Industry: Nitrogen fertilizer is commonly used in industry, and its demand is mainly urea, accounting for about 30% of the total nitrogen fertilizer consumption. Therefore, industrial demand accounts for about 90% of the total urea consumption. According to statistics, the apparent consumption of nitrogen fertilizer in my country from January to September 2022 is 82.002 million tons (annual consumption of 28.956 million tons). The 51.21 million tons decreased by 1.03 million tons. (3) Agriculture: The peak period of fertilizer demand for crops generally occurs from late October to early November. At present, agricultural demand may gradually drop in October. Fertilization peak period, so the impact on domestic demand is limited.
3. Export and import and export
From January to September 2022, my country’s urea export volume increased by 26.09% year-on-year, and the average export price decreased by 8.42% year-on-year. From the perspective of export volume, my country’s total export volume of urea will reach 3.441 million tons in 2021, a year-on-year increase of 22.2%. (4) From the perspective of the international market, due to the urea export ban imposed by India and Pakistan in the early stage, the export of domestic enterprises was restricted. In terms of the international market, my country’s urea export volume reached 1.367 million tons from January to September 2022, an increase of 26.09% year-on-year; among them, my country’s exports to India and Pakistan were 1.004 million tons and more than 381,000 tons respectively; exports to the European Union and Southeast Asia They are more than 252,000 tons and more than 83,000 tons respectively.