After the introduction of the high-tariff policy in December, urea prices have shown a downward trend. In some regions, the decline rate is still relatively large. Currently, urea factory prices in Shandong, Hebei, and Shanxi have fallen to 1,880 yuan (t price, the same below). The actual transaction price has reached a low of about 1,850 yuan, and the factory price in these areas was generally above 2,000 yuan. In the early stage, the wholesale price of urea in Guangzhou reached a maximum of 2,200 yuan, but it has now dropped to around 2,050 yuan.
Many people see the tariff adjustment as the most critical factor in triggering the fall in urea prices. This only saw the appearance of things and did not find the real reason behind it. In fact, the most critical factor in the fall in urea prices is the decline in overall prices. Since October, due to a variety of factors including US$600 billion in U.S. issuance of bonds, sharp rise in international commodity prices, and increased inflation expectations, almost all Commodities are rising sharply. Methanol, melamine and other prices rose by more than 30% in a month. Urea and other fertilizer prices also rose the most at this time. But now, with the introduction of the national stable price policy, the withdrawal of speculative funds, and the slight decline in inflation expectations, the prices of agricultural products such as cotton and sugar that have been highly hyped up have fallen sharply. The price of methanol has risen from the previous high price of more than 3,800 yuan. After falling below 3,000 yuan today, melamine fell from the highest price of 13,000 yuan to the current 10,000 yuan. In recent years, these countries have not introduced new tariff policies, but they have fallen sharply, which means that the market itself is working. It can be said that even if the country does not issue a high tariff policy, the price of urea will also have to fall, because overall prices are now falling. However, the introduction of the national high tariff policy has accelerated the decline in the price of urea, which is a fuse and booster. However, it is not the most crucial factor that determines the role.
In addition, an important factor in the early rise in international fertiliser prices is that the international market expects that China will introduce a high tariff policy and restrict fertilizer exports, and thus has intensified its procurement efforts and pushed up international fertilizer prices. After the price of international fertilizers became clear after China’s tariff policy became clear, prices have not only continued to rise, but have also fallen in some regions. Originally, China could not export, and the supply of international fertilizers decreased. The price should rise, why not increase? What about falling? It is because the market reacted in advance, purchased in advance, and pulled up the price in advance. If there is no expectation of China introducing a high tariff policy, international fertilizer prices will not rise so high, and demand will not be so hot. China's early chemical fertilizer exports actually sold a high price, so we can't simply see the negative side of the high tariff policy. In a sense, high tariffs also allow fertilizer companies to benefit in advance.
Many people see the tariff adjustment as the most critical factor in triggering the fall in urea prices. This only saw the appearance of things and did not find the real reason behind it. In fact, the most critical factor in the fall in urea prices is the decline in overall prices. Since October, due to a variety of factors including US$600 billion in U.S. issuance of bonds, sharp rise in international commodity prices, and increased inflation expectations, almost all Commodities are rising sharply. Methanol, melamine and other prices rose by more than 30% in a month. Urea and other fertilizer prices also rose the most at this time. But now, with the introduction of the national stable price policy, the withdrawal of speculative funds, and the slight decline in inflation expectations, the prices of agricultural products such as cotton and sugar that have been highly hyped up have fallen sharply. The price of methanol has risen from the previous high price of more than 3,800 yuan. After falling below 3,000 yuan today, melamine fell from the highest price of 13,000 yuan to the current 10,000 yuan. In recent years, these countries have not introduced new tariff policies, but they have fallen sharply, which means that the market itself is working. It can be said that even if the country does not issue a high tariff policy, the price of urea will also have to fall, because overall prices are now falling. However, the introduction of the national high tariff policy has accelerated the decline in the price of urea, which is a fuse and booster. However, it is not the most crucial factor that determines the role.
In addition, an important factor in the early rise in international fertiliser prices is that the international market expects that China will introduce a high tariff policy and restrict fertilizer exports, and thus has intensified its procurement efforts and pushed up international fertilizer prices. After the price of international fertilizers became clear after China’s tariff policy became clear, prices have not only continued to rise, but have also fallen in some regions. Originally, China could not export, and the supply of international fertilizers decreased. The price should rise, why not increase? What about falling? It is because the market reacted in advance, purchased in advance, and pulled up the price in advance. If there is no expectation of China introducing a high tariff policy, international fertilizer prices will not rise so high, and demand will not be so hot. China's early chemical fertilizer exports actually sold a high price, so we can't simply see the negative side of the high tariff policy. In a sense, high tariffs also allow fertilizer companies to benefit in advance.
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