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Market Analysis of China Urea Industry

Market Analysis of China Urea Industry2019.10.22

Urea, as a traditional agricultural product, is mainly used for fertilizer manufacturing. China’s urea industry has remained a relatively balanced status in supply and demand for a long time, however, with the continuous tightening of domestic environmental protection policies, China's urea supply is tightening.


Natural gas, coal, and petroleum are the three raw materials for fertilizer production. From the perspective of production capacity structure, currently, China's coal-based urea account for 77%, while gas-based urea only accounts for 23%.


Due to sufficient domestic supply, China's urea import volume is relatively low, while the export volume has been continuously rising. India, Pakistan, Bangladesh and other South Asian countries are the main export markets of China’s urea products. However, due to the relatively low technical requirements of urea production, many developing countries are continuously increasing the urea production capacity to substitute the exports, plus the negative impact caused by the Sino-US trade dispute, China's urea export volume is also significantly shrinking in recent years.


China's urea production presented a steady growth in general from 2010 to 2015, and reached the peak of 75.1 million tons in 2015. From 2016 to 2018, influenced by environmental protection policies, China's urea production showed a trend of gradual decline. By the end of 2018, China's urea production fell to 51.9 million tons.



The operating rate of China's urea industry has showed a gradually declining trend in the recent years . In 2012, China's urea operation rate was as high as 91.62% while in 2018,it was less than 70%!



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