Recently, with the global urea supply picking up, the demand is basically flat, and the pattern of urea supply and demand is developing to a balanced state. Especially in the context of reduced demand, the inflection point of domestic urea supply and demand has arrived ahead of schedule, and the demand for autumn fertilizer has basically returned to the pace before the start of previous years. Based on the emergence of the inflection point of supply and demand pattern, the domestic urea price continued to fluctuate at a high level, and the price only returned to the previous high before the fourth bidding day, with no obvious new high; After entering August, with the delay of bidding, the overall demand in most parts of the northern hemisphere was sluggish, the spot price of urea began to loosen, and the prices in various places fell 100- 150 yuan/ton. In the first half of July, urea futures mainly moved closer to the spot, and the basis converged from 500 yuan/ton to 250 yuan/ton, roughly returning to a reasonable level; In the second half of the month, urea futures fluctuated with the spot high. After entering August, it also weakened 100 yuan/ton.
At present, domestic urea is in the pre-start stage of autumn fertilizer demand, but in view of the year-on-year decline in domestic spring fertilizer demand and less demand for nitrogen in autumn fertilizer, the current price is greatly tested; However, the variables of strong/weak supply and demand are still there, mainly from external demand as in the first half of the year. Looking forward to the urea autumn fertilizer market, we should first look at the expected fulfillment of domestic demand, then look at the relay degree of external demand, and finally look at whether the tight pattern at the cost end can be sustained. Specifically, the main favorable factors of urea at present are: domestic agricultural demand is about to start, domestic industrial demand is good, external demand is still there, sales are good, and enterprise storage capacity is low; The main negative factors are the continuous accumulation of inventory and the absolute high price and profit. On the whole, the current high spot valuation of urea is better driven, and the higher price requires better matching of supply and demand pattern; Strategically, the empty orders in the previous September can be closed one after another, while the valuation of 1 contract is normal, so it is recommended to wait and see.
First, proceed from domestic demand: from "no increase in price" to "no decrease in price"
As can be seen from the figure 1, the apparent consumption of urea in China increased by 9% in the first half of 2020 compared with that in 20 19, and the export was basically flat in the same period, which made the apparent consumption growth rate of urea in the first half of the year lower than that in China. In the case of a large increase in demand, the spot prices of urea and synthetic ammonia continued to be low after the beginning of March 2020 (see Figures 2 and 3). In addition to the cost collapse caused by the sharp drop in energy prices, the main reason for the deviation between quantity and price is that domestic equipment is on the far right side of the global capacity cost curve. When the gap between supply and demand caused by the decrease of supply and the increase of demand does not need the most expensive domestic devices to fill it on a large scale for the time being, the high start-up and high daily output of domestic urea devices (see Figure 4) are interpreted as the situation of oversupply in the later period. Based on the above pessimistic expectations, the domestic urea price and demand situation have formed a situation of "ice and fire".
This year, similar to last year, there is also a deviation between quantity and price: in the first half of the year, domestic apparent consumption decreased by 6%, the spot price of urea "decreased or not", and the spot price increased by 50%. And from February 2020 to February 20021year, there was a rare situation that the domestic price increase lagged behind the international price increase. "Reducing the quantity without reducing the price" stems from the fact that domestic urea plants have become an important force to fill the international supply and demand gap after the international supply and demand gap has gradually fermented, so domestic supply not only needs to match domestic demand, but also needs to bear part of international demand; Therefore, although domestic demand has decreased, the decrease is far less than the increase of international demand, and the domestic supply and demand pattern is more tense. After forming a large number of exports at the end of the first quarter, it has once again become the leader of the international price series.
At present, the domestic demand for autumn fertilizer is at the pre-start node, and the supply and demand situation is gradually recovering from the downturn. On the supply side, there are still many new devices planned to be put into production in the medium and long term, but the progress is disturbed by policies and other factors, and there is great uncertainty. At present, many projects are postponed; At present, the daily output is 1.55 million tons, and there is still a short-term supply space of 10%. On the whole, there is a certain redundancy in supply during autumn fertilization. There are differences in demand. The demand for autumn fertilizer is similar to that of spring fertilizer, and may be reduced by about 5%. In the case of good profits, industrial demand is expected to maintain normal growth; On the whole, there is a certain pressure on domestic demand during the autumn fertilizer period, especially in the recent urea plant, the number of days of early harvest and the production and sales rate both hit a new low in the year, 2-3 weeks later than last year's demand start. Details are as follows:
At the beginning of this year, urea production capacity expanded for the first time in the past five years. However, after the first quarter, many projects originally planned to be put into production in the second quarter were passively postponed, so the daily production increase brought by new devices was about 0.2-0.3 million tons, and the upper supply limit was limited, still around 6.5438+0.7 million tons. The operating rate and daily output of urea plant rose rapidly after centralized maintenance (see Figure 4) and returned to the previous average level. However, the number of days in advance and the ratio of production to sales did not rise simultaneously (see Figure 5), which continued the weakening trend since the beginning of June and continued to hit a new low in the year. Generally speaking, there are two uncertain factors in the current supply. The first is when the inflection point of the strong ratio of pre-collection to production and sales will appear and whether it can be maintained in the high boom zone; Second, after two years of high-load operation, if the demand for autumn fertilizer is good, whether the domestic urea plant can continue to operate at the upper limit of daily output.
The demand for urea in domestic agriculture is related to the analysis in the annual report "The country's heavy weapon is strengthened over time". It is predicted that the intensity of agricultural demand in 20021year will be between 20 19 and 2020, which is closer to the value in 2020. The actual data show that with the steady growth of domestic industrial demand, the apparent domestic urea consumption in the first half of 2019-202/kloc-0 was 24.3 million tons, 26.2 million tons and 25 million tons respectively, that is, the agricultural demand of 202 1 0 was weaker than expected in the annual report, although the demand was 2019. Therefore, it is expected that the demand for autumn urea fertilizer will be consistent with that of spring fertilizer this year, with a year-on-year decrease of about 5%. As can be seen from the supply and demand of compound fertilizer in Figure 6, compound fertilizer continues to be in a state of low start-up and low inventory under the condition that the increase of raw materials such as nitrogen, phosphorus and potassium is much greater than that of finished compound fertilizer. The apparent consumption in the first half of the year is higher than 20 19 but lower than 2020, which indirectly confirms that the domestic demand for chemical fertilizer this year is lower than 2020.
Compared with agricultural demand, the demand of urea industry continues to exceed expectations, in which the price of melamine has increased by 200% since the National Day last year, and the gross profit has continued to be above 4,000 yuan/ton (see Figure 7); Stimulated by high profits, the operating rate of melamine plant has been at a very high level in the past five years. Dynamically, the high profit situation of melamine is unsustainable, but it can still maintain a reasonable profit with a high probability, mainly because the domestic melamine production capacity accounts for about 70% of the world, and the foreign demand gap itself is solved by domestic products. The recovery of foreign supply in the later period has little effect on melamine export.
Demand for wood-based panels is weak. In the long run, the output of wood-based panels has entered a period of low growth, with the growth rates of 1.3%, 3.2% and 3.2% from 2065438 to 2020 respectively, and the annual demand for urea has increased by about 300,000 tons. In the middle cycle, the real estate data weakened month by month. From June 5438 to July this year, the new construction slowed down and the completion accelerated, which made the growth rate of the existing construction area decline and the corresponding demand base of wood-based panels decreased; In the short term, the real estate industry is still subject to policy constraints, which can be indirectly confirmed by the operating conditions of real estate companies and the performance of the capital market. Generally speaking, wood-based panels will maintain a stable growth pattern with a high probability, but the growth rate is lower than melamine. Based on the situation of melamine and wood-based panels, it is expected that the industrial demand for urea will maintain a positive growth.
To sum up, there is a space of 10% for domestic supply of urea in autumn fertilizer period, and the domestic demand is weaker than that in 2020, so it is not difficult to maintain the balance between supply and demand. The variable that may break the balance still comes from external demand, which is the biggest X factor to promote market development since the third quarter of last year.
Second, it is obvious in external demand: from "increasing marginal effect" to "decreasing marginal effect"
Compared with the deviation between domestic demand and price, external demand and domestic price are consistent: in the second half of 2020, compared with the second half of 20 19, exports increased by 600,000 tons, and spot prices rose by12%; In the first half of 20021compared with the first half of 2020, the spot price increased by 700,000 tons (see figure 2). In addition, it can be seen that in the second half of 2020 and the first half of 20021year, the price increase of urea was quite different when the export increment and the increase were similar, showing a state of "increasing marginal effect". It can also be seen from the bidding situation of the fourth bidding printing in 2020 (see the yellow area in Table 2) that when the domestic supply of urea becomes the last line of defense of the global urea trade system, that is, the proportion of domestic supply increases greatly, the global supply redundancy of urea drops to a very low level, the supply-demand pattern enters an ultra-tight balance state, and the price elasticity begins to increase rapidly. By the end of 2020, with the increasingly tight supply, the international urea supply and demand pattern will further ferment to a soft gap state, that is, the price needs to be greatly increased to match the continuous increase in demand. From the end of 65438+February in 2020 to the end of 202 1 month, the international urea price rose by 33%, and the domestic urea price followed passively. As the price difference between domestic and international markets keeps widening, the printing price keeps higher than the market price, and domestic urea exports increase rapidly, which alleviates the gap between international urea supply and demand, and at the same time makes domestic urea supply and demand change from a wide balance to a tight balance (see figure 10). Since the beginning of April, the inventory of enterprises has continued to decline, and the supply in the domestic market has become increasingly tight, rising by 40% from the end of June to the beginning of August, which is higher than the 32% increase of international urea in the same period.
Where does the third one end? Spot price/profit ratio is high.
Recently, the prices of energy and some chemicals have fallen to varying degrees: the downward trend of energy prices is mainly due to the decrease of tourism demand in South Asia and Southeast Asia, which leads to the narrowing of the gap between supply and demand, while the downward trend of prices of daily necessities and durable goods such as polyester and polyolefin directly facing the terminal is mainly due to the seasonal weakening of demand; In the future, the gap between energy supply and demand will be further narrowed, which will put pressure on energy prices. However, most chemicals have different levels of peak season expectations and there is room above prices. At present, compared with other chemicals, urea has a higher profit. From the time dimension and its own vertical comparison, the profit of urea process is also at a high level. Considering that the absolute spot price of urea in recent 10 years is also extremely high, the spot valuation of urea is high, and there is a large room for price and profit compression; However, the high price and profit of urea are reasonable when the production progress at home and abroad is less than expected and the compression power is temporarily lacking. The return of valuation in the later period may be due to the downward trend of energy prices, lower-than-expected external demand and higher-than-expected expansion of foreign production capacity.
The urea futures contract was partially revised by overestimating the spot with high basis. Recently, the basis of each contract has dropped from high to medium high. In September, the basis of the contract was near 220 yuan/ton, and in October, the basis of 65438+ 10 was near 360 yuan/ton. In view of the fact that the contract basis in July is around 160 yuan/ton, it is expected that the convergence space of the contract basis in September is limited, while the 1 basis in June still has a large convergence space. The path of basis regression in the previous period was that futures converge to spot, but now the probability of convergence from spot to futures is higher: the main factor determining the convergence path is whether the increase of external demand can make up for the decrease of domestic demand. If external demand is delayed and domestic supply remains loose, the spot will move closer to futures in the future, and the basis will be repaired by weakening the price; On the other hand, if domestic exports are needed to make up for the international gap again, the future futures will move closer to the spot and repair the basis by strengthening the price.
This article originated from yongan futures.