Urea Resin Prices are Falling in the Global Market as Demand Dwindles
- 13-Dec-2022 2:30 PM
- Journalist: Motoki Sasaki
Global Urea Resin prices fell in November 2022 due to the companies' lack of demand and high inventories. The past several weeks have seen a steady decline in European benchmark Natural Gas prices, which is used as an upstream for Urea Resin production as the region has seen warmer weather than typical, which has helped to reduce demand. Most fertilizers prices have remained high by historical standards; however, due to capacity additions, Urea Resin prices are anticipated to remain lower than expected during the year's end. The latest Urea Resin price assessments also showed declining prices due to poor demand in many countries.
November monthly assessment shows the prices for Urea-Formaldehyde Resin at USD 985/MT on a FOB Hamburg basis, while Urea-Formaldehyde Resin on the FOB Qingdao (China) prices was assessed at USD 910/MT.
On the demand front, Agricultural and Industrial demand are both typical from a demand standpoint. The enthusiasm for Urea Resin procurement is high, and the compound fertilizer plant works reasonably well. The downstream market has a significant wait-and-see attitude for Urea Resin, and thus purchases have slowed.
In terms of supply, the Chinese market is well supplied as around 150,000 tonnes of Urea Resin are produced daily despite many plants being shut for maintenance. However, inspections for environmental protection in Shanxi, China, have prevented operations from starting again from the supply position. The European market is also running at an average pace as operating rates have attained steadiness.
According to ChemAnalyst, Urea Resin prices will decline further in the coming year for Urea and formaldehyde, as there is a negative outlook because additional Middle Eastern plants start up feedstock natural gas prices are expected to decline further in the global market, and some European factories are also anticipated to restart. Additionally, On the other side, an additional 3.8 million tonnes of Urea Resin will be produced year globally.
