Hua Xia Shi Bao·2025-10-13 12:39Core Viewpoint - The price of urea in China has been declining, with the average price for small granular urea at 1616.50 yuan/ton as of October 11, 2025, representing a 16.19% decrease compared to 2024, and is now below the average price of the past decade [2] Supply and Demand - Both supply and demand for urea are expected to grow in 2025, but the growth rate of demand is significantly lower than that of supply, leading to a persistent supply-demand imbalance [2][4] - Urea production capacity in China has increased to 79.15 million tons in 2025, a 2.51% increase year-on-year, with an average daily output of 197,000 tons, which is higher than the previous years' levels of 150,000 to 170,000 tons [4][5] - The domestic urea inventory reached 1.338 million tons as of October 9, 2025, a 101.8% increase from the year's low, with an average annual inventory of 1.073 million tons, marking a 70.6% increase from 2024 [5] Price Trends - The urea market has shown a trend of first rising and then falling throughout 2025, with significant price drops in the third quarter. Prices fell from over 1800 yuan/ton in June to as low as 1560 yuan/ton in early October [4] - The decline in urea prices is primarily attributed to oversupply, as new production capacities have been added over the past three years, while domestic consumption growth has not kept pace [4][6] Industry Performance - Companies in the urea sector are experiencing significant financial difficulties due to falling prices. For instance, Lu Hua Technology reported a net loss of 229 million yuan in the first half of 2025, while Sichuan Meifeng's net profit dropped by 95.17% to 803,130 yuan [3][10] - The overall performance of the urea industry has been impacted by high operating rates and adverse weather conditions, leading to a sustained oversupply and downward pressure on prices [11] Future Outlook - The market is currently under pressure, but there may be opportunities for price rebounds in the fourth quarter as domestic storage efforts begin and some production facilities undergo maintenance [7] - The focus will be on export dynamics and changes in domestic production capacity, as the market continues to navigate the challenges of high supply levels [7]