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With the continuous drop in the price of urea, it appears that the burden on farmers has been reduced. However, the author believes that there is a potential risk behind this price drop. As the price of urea raw materials continues to rise, and the urea ex-factory prices continue to drop, when the prices fall close to the cost, some manufacturers will not be able to get rid of the problem of capital circulation caused by product inventories. When the company is seriously at a loss, it will be forced to stop production. When the peak of spring fertility is applied next spring, it is possible that the supply of urea will fall short of demand and will drive the price of urea to rise again.
Therefore, to really lower the price of urea, we should first try to reduce the price of urea raw materials, and as a manufacturer should actively tap potential, strengthen management, and strive to reduce production costs. The functional departments of chemical fertilizers must do a good job of regulating the total amount of urea production and take effective measures to stabilize the price of urea so as to avoid turbulence in the fertilizer market.
Since the beginning of September, the market price of Suzhou urea has been declining, and the retail price of urea per ton has dropped to around 1,800 yuan in the first ten months of November. The price of urea has dropped by 200 yuan per ton in two months. The main reason is that some fertilizer manufacturers are desperately pushing down prices in order to increase product flow and solve the problem of capital circulation.
June 30, 2024