Compound Fertilizer, Monoammonium Phosphate, Nitrogen Fertilizer, Phosphate Fertilizer, Potassium Chloride, Potassium Fertilizer, Potassium Sulfate
Supply expected to shrink in the fourth quarter
In terms of Nissan, it is currently around 164000 tons, a year-on-year increase of 10000 tons. In July and August, we will pay attention to the production situation of Shandong Mingshui and Hualu Jingzhou devices, which is still where the supply increase lies. However, in the fourth quarter, there are currently expectations of a reduction in supply. One is the limited production in autumn and winter in Shanxi region. Currently, Shanxi's daily production is around 20000 tons. However, after October of previous years, Shanxi will gradually reduce production, and ultimately the daily production will decline to below 10000 tons, with a daily reduction of 60% -70%; The second is the reduction of gas head production in winter. The daily full load of domestic gas head production is generally maintained at a level of over 40000 tons. The reduction of gas head production in the fourth quarter still needs to be paid attention to. According to historical statistics, the overall reduction of gas head production in the fourth quarter is about 80%, and the minimum daily production of gas head will drop to below 10000 tons. In the future, attention should also be paid to it (although last year, under the efforts of supply guarantee, the gas head reduction cycle in Shanxi has changed, but there are still periodic production reductions). Therefore, in terms of supply, the fourth quarter variables still exist.
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International rebound and marginal improvement in exports
Export remains the main factor affecting the market in the fourth quarter. With the maintenance of some international devices and the rebound of international natural gas, international prices have maintained an upward trend, driving the price difference between internal and external markets to gradually narrow. Moreover, there have been some export orders following up in China since July, with previous international short selling traders mainly supplementing orders. In the near future, rumors of the Indian Standard will be released around the middle of the month, which also brings positive sentiment to the market. In the long run, regardless of the participation of the Indian Standard this time, as long as China has export volume, what will be vacated is the future domestic supply. Moreover, there will be an increase in export orders from other regions, which will inevitably reduce the inventory that should have accumulated in the off-season. If there is a supply reduction in the fourth quarter, the market supply and demand status can be imagined.
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Attention also needs to be paid to the demand for light storage
Thin storage is the main demand in the fourth quarter every year. According to theoretical values, the thin storage of a single urea variety should be around 4 million tons per year, but in reality, it may be much less than this quantity. However, this is already the off-season of demand, and if inventory cannot be effectively accumulated, a small amount of demand initiation will also cause periodic supply shortages. At the same time, the use of winter wax fertilizer in the Jiangsu region in the fourth quarter and the subsequent procurement of Northeast light storage in the market will also bring benefits.
In summary, the pessimistic expectations brought about by the expansion of urea production capacity may need to be reassessed, mainly due to the variables of supply and export. If there is indeed a supply contraction in the fourth quarter, then the supply guarantee may still not be able to stop.
