Domestic buyers have kept showing healthy demand for urea this week. Together with a prices uptick on the paper market, it has pushed quotes for the fertilizer up this week. Thus, domestic prices for prilled urea have risen by CNY 67.5/t ($9.5/t) to CNY 1,555—1,570/t ($219—221/t) EXW China. Those for the granular variety have gone up by CNY 70/t ($9.8/t) to CNY 1,730—1,780/t ($244—251/t) EXW China over the week.

The country’s daily urea output has increased by 1,500 t to 188,000 t since last week. Considering that some local producers continue to carry on scheduled overhauls at their facilities, the fertilizer output may reach and even surpass the mark of 200,000 tpd, once all manufacturers are back on stream, trading sources say. Besides, some market players suppose that the buying interest in urea may decline in coming weeks. Altogether, it may result in a significant decrease in urea quotes.

As for the export market, its participants keep awaiting the final decision on the fourth round of urea export quotas. They were anticipating the allocation of the quotas last week, as some of them believed that up to 300,000 t of Chinese urea may leave loading ports for India by 10 December under the latest purchase tender there closed on 15 October. However, as India’s RCF has managed to secure only 430,700 t of the fertilizer out of 2 million t it initially required, with only 90,000 t of the product destined for the East coast of India, Chinese companies are highly unlikely to sell the aforementioned amount of Chinese urea for shipment to India. By the time an Indian importer announces a new purchase tender, the Chinese government may already issue new export allocations, and a big amount of Chinese product may depart for India under the next tender if the CFR prices under it prove high. As the China Nitrogen Fertilizer Industry Association (CNFIA) is reportedly scheduled to have a new meeting this week, the decision on new export quotas may be announced soon.

Asking prices for prilled and granular urea have remained at last week’s level of $370—380/t (CNY 2,626—2,698/t) FOB China in bulk and $380—390/t (CNY 2,698—2,769/t) FOB China in bulk, respectively, this one. Reminder: the authorities set a floor export price of $425/t (CNY 3,017/t) FOB China in bulk specifically for shipments to India at the end of September. For those to the non-Indian markets, they were at $410/t (CNY 2,911/t) FOB China in bulk for prilled urea and $415/t (CNY 2,946/t) FOB China in bulk for granular urea in mid-September.

As of 29 October, port stocks of the prilled and granular grades totalled to 210,000 t, as much as last week.

The total amounts of the fertilizer Chinese producers had on hands have remained unchanged, around 1.6302 million t, according to the statistical data. However, some market players have reported that the stocks have decreased to around 1.5543 t of urea.

The USD/CNY exchange rate was 7.099 on 29 October.