China Urea Granular Market Update: High Inventory Keeps Prices Under Pressure

China's urea market stayed weak during July 10-16, 2026. The short-term market remained under pressure from high daily output, continued inventory accumulation, limited large-scale export release and intermittent domestic demand. Producers had less pricing power, and discounting to attract orders became more common in several regions.

In Shandong Linyi, the urea reference price moved from RMB 1,780/mt to RMB 1,750/mt, down RMB 30/mt or 1.69%. This is equal to about USD 257/mt using the working exchange rate of USD 1 = RMB 6.8. The main urea futures contract closed at RMB 1,693/mt, down RMB 35/mt or 2.03%, equivalent to about USD 249/mt.

Related product for buyers: Overseas importers can review CHCA Chem's granular urea product page for specification, packing, COA and shipment information before sending an RFQ. Buyers comparing smaller particle material can also check prilled-grade urea for packing and handling comparison.

Key Takeaways for Overseas Buyers

The main issue was supply pressure. China urea weekly output was estimated at 1.5017 million mt, only slightly lower than the previous week. Average capacity utilization was 89.91%, down 0.54 percentage points, but still high enough to keep supply pressure in place.

Inventory increased faster than expected. Enterprise inventory reached 1.4089 million mt as of July 15, up 173,100 mt from the previous week, a 14.01% increase. Port sample inventory also rose to 214,900 mt as of July 16, up 35,000 mt or 19.46% week on week.

Export expectations provided some support but had not yet changed the supply-demand balance. Estimated export volume for the week was around 50,000 mt, while the next period was expected around 80,000 mt. The market still needed time to see whether export preparation would translate into larger actual shipment volume.

Supply and Demand Conditions

Domestic demand remained uneven. Agricultural demand was in a seasonal gap in many regions, while industrial demand recovered slowly. Compound fertilizer producers mainly purchased for immediate needs, and broader downstream sentiment stayed cautious because many buyers expected weaker prices.

Pre-sale order coverage also weakened. Mainstream producer pre-sale days averaged around 4.82 days, slightly lower than the previous week. This showed that producers had limited order support and needed to maintain flexible pricing to encourage new transactions.

Although some export-related cargoes started moving toward ports, domestic demand was still not strong enough to absorb production smoothly. As a result, inventory accumulated at both factory and port levels, and the industry remained in a high-inventory environment.

Cost and Related Product Signals

Cost signals were mixed. Shandong synthetic ammonia moved slightly higher to RMB 2,106/mt, up RMB 23/mt, while coal costs showed small regional increases for some urea producers. However, the increase in cost did not give producers strong pricing support because the market's main pressure came from supply and inventory.

Compound fertilizer prices in Shandong remained stable around RMB 3,460/mt for 45% S compound fertilizer, but movement was generally moderate. Melamine market sentiment was weak despite a small weekly average change, and downstream buyers were cautious due to soft end-market demand.

Market Outlook

For the following week, China urea was expected to continue weak and narrow-range movement. Shandong Linyi was expected around RMB 1,720-1,750/mt, or about USD 253-257/mt. Daily output may decline slightly to around 212,000-214,000 mt, but this reduction may not be enough to quickly remove inventory pressure.

Domestic demand may recover slowly, with limited agricultural replenishment and gradual industrial purchasing. If prices return near previous lows, some downstream buyers may make low-price replenishment, but this is more likely to slow the decline than create a strong rebound.

Buyer Considerations

For procurement teams searching for a urea supplier China, manufacturer, distributor or exporter, current market weakness may improve negotiation room, but final export offers should be confirmed close to shipment. Buyers should specify nitrogen content, particle form, packing, order quantity, destination port, COA requirements and target shipment window.

Domestic RMB prices and USD equivalents in this update are market references only. Export quotations depend on cargo availability, inland logistics, port movement, freight, documentation and booking schedule.

FAQ

Why did China's urea price weaken during July 10-16, 2026?

The market weakened because supply stayed high, inventories increased, export volume had not yet expanded enough, and domestic demand remained intermittent.

How high was China's urea inventory?

Enterprise inventory reached about 1.4089 million mt, up 14.01% week on week. Port sample inventory reached about 214,900 mt, up 19.46% week on week.

What was the Shandong Linyi urea price reference?

Shandong Linyi moved to about RMB 1,750/mt, down RMB 30/mt from the previous week, equivalent to about USD 257/mt at USD 1 = RMB 6.8.

Could export demand support China's urea market?

Export preparation showed some positive signs, but large-scale release had not yet formed. The market still needs to watch actual port loading and shipment progress.

What should importers include in a urea RFQ?

Importers should provide particle form, nitrogen content, packing, quantity, destination port, COA requirements and shipment window so suppliers can prepare accurate offers.