After the National Day, urea daily production reached 180,000 tonnes, and the price of urea was shaky. But at the same time there are some good support: First, the probability that the entry of the national fertilizer off-season commercial reserves has been delayed, with the sweep of the autumn planting, the entry of the national fertilizer off-season commercial reserves has been imminent; Second, the decline in the price of urea is that dealers are worried about the urea market is low and do not dare to stock, and the reality of the low social urea inventory has not fundamentally changed; Third, the price of mono ammonium phosphate（MAP） to take the lead in the rebound, which means that the Northeast of compound fertilizer enterprises to prepare stocks and driving imminent; four is Shanxi policy production restrictions do not seem to be cancelled; five is the international urea prices higher than domestic, exports become possible. But the above benefits are only short-term benefits, as long as the domestic urea production continues to be about 180,000 tonnes per day, then these good support for the price of urea can only be maintained for two months at most.
So where is the real upside of urea? I believe that the black swan event is the biggest positive of the urea market.

First, the coal market storm clouds

This year, the market has been pessimistic about the trend of coal prices, that coal prices are easy to fall and difficult to rise, the first half of the coal market is indeed so. But the sudden change of the wind and clouds, September coal mine safety inspection efforts to increase, coal supply may be a sharp contraction, the price out of a wave of powerful rising market. After the National Day, coal prices continued the upward trend. Recently, the price of 5500kcal power coal in Qinhuangdao has exceeded RMB1000 per tonne.
In November, the north will enter the winter heating period one after another, and coal demand will usher in a new peak. If coal prices continue to rise, then the cost of urea support will increase, which is the first black swan.
Second, international natural gas prices soared

During the National Day holiday, international crude oil prices fell sharply, and natural gas prices rose sharply, which can be described as ice and fire.
Based on the higher inventories in major natural gas supplying and consuming countries, coupled with the fact that October is the off-season for natural gas consumption, the market predicted that international and domestic natural gas prices would fall deeply in October, but it was not expected that the U.S. natural gas futures prices hit new highs in the past six months. While it was no surprise that the Groningen gas field in the Netherlands was officially shut down on 1 October, the Chevron LNG plant in Australia, which accounts for 7% of the global LNG supply, announced a strike in early September and then a renewed strike recently after production resumed in late September. Soaring international natural gas prices will certainly affect the domestic, is bound to have an impact on the winter gas head urea production rate, which is the second black swan.
Third, the outbreak of large-scale conflict between Palestine and Israel

Palestine and Israel have been the norm in small fights, but the outbreak of large-scale conflict on 7 October caused a large number of deaths, the escalation of the conflict is inevitable, the duration of the long time and the spillover effect is difficult to predict, and has become a geopolitical event that has to focus on, which is the third black swan.
The crisis in Ukraine has not yet ended, and the Palestinian-Israeli conflict has risen again. The fact that there are two wars going on at the same time, both taking place in the heart of energy and with a common invisible protagonist – the United States – makes all predictions unfeasible. The turmoil in the Middle East is bound to be reflected in energy prices, thus affecting the cost and supply of urea.
Black swan events are difficult to analyse the market, and the recent series of black swan events is the biggest positive for the urea market. However, I believe that it is not easy to take these black swan events as a reason to bottom out, after all, this is not the world’s norm, who can not predict the direction of the late development.