<article><p class="lead">Urea operations in northeast China's Hebei province are under threat following a new Covid-19 lockdown.</p><p>Hebei's provincial government announced a lockdown across cities including Shijiazhuang, Xingtai and Langfang on 12 January to control the spread of the coronavirus. </p><p>Hebei's two main export urea suppliers — Zhengyuan with 1.2mn t/yr of production capacity in Shijiazhuang city and Dongguang with 1.1mn t/yr in Cangzhou city — have encountered logistics issues with feedstock coal supplies and urea distribution. Urea production is currently unaffected but truck deliveries across the province have been disrupted. </p><p>Tianjin port is the major export outlet for the two suppliers. But the latest Covid-19 outbreak has slowed down unloading and loading operations at the port, with suppliers facing difficulties in delivering product. Zhengyuan is now delivering cargoes to Hebei's Huanghua port instead.</p><p>Both producers fear production may be affected if the situation does not improve. National daily urea output is already around 120,000 t/d because of <a href="https://direct.argusmedia.com/newsandanalysis/article/2166043">gas-related winter curbs</a>.</p><p>Chinese distributors are urgently building stocks fearing further lockdowns, pushing the domestic prilled urea price up to 1,900 yuan/t ($294/t) ex-works bagged in east China's Shandong, the major exporting market for urea in China, up from Yn1,790-1,800/t ex-works last week. </p><p>China's spring festival travel rush ahead of the lunar new year festivities is due to start on 28 January. It lasts for 40 days and will largely constrain logistics for fertilizers and may further affect urea supplies. </p></article>
