August 1st, 2023, Urea daily comment: Prices continue to weaken low-end market transactions increased

June 12, 2024, 9:21 AM

Feidoodoo

2527

Guide

Highlights at a glance

The domestic urea market showed a mixed trend on August 1, with the price index at 2,519.09, slightly down month-on-month but up 1.78% year-on-year. Urea futures (UR2309) rose 1.60%, closing at 2,354 amid intraday volatility between 2,296 and 2,368, supported by a 420-lot increase in open interest. However, the spot market continued to weaken, with prices declining 20–120 yuan/ton across most regions due to reduced domestic transactions, stalled exports, and weather-related transport disruptions. Manufacturers faced growing inventory pressure, prompting selective discounts. While Northeast prices rose slightly, North, Northwest, East, Central, and South China all saw declines. Supply remains robust, with operating rates above 80% and daily output exceeding 170,000 tons, while demand weakens as farmers enter the seasonal lull and downstream industries maintain only minimal restocking. Despite downward price adjustments, order intake remains sluggish. With market sentiment unclear and fu

Domestic urea price index:

According to the fat duo data estimates, the price index of small urea particles on August 1 was 2519.09, down 3.18 from yesterday, down 0.13% from the previous month, up 1.78% year-on-year.

Urea futures market:

Urea UR2309 contract opened later this morning, the price quickly rose slightly after falling to the lowest point within the session 2296, and then again shook up. In the afternoon, the price continued to rise, rising to the highest point within the board 2368 after a narrow decline, the end of 2354. Urea UR2309 contract opening price: 2305, the highest price: 2368, the lowest price: 2296, the settlement price: 2331, the closing price: 2354, the closing price compared with the previous trading day settlement price increased by 37, up 1.60% from the previous day, the fluctuation range of 2296-2368, the spread of 72; 09 Contract increased by 420 lots today, as of the current position of 235,950 lots.

Spot Market analysis:

Today, the domestic urea spot market price continued to decline slightly, and most regional quotations fell 20-120 yuan/ton. Domestic transactions significantly reduced, exports also temporarily slowed down stalemate, coupled with the weather affected some regional transportation, manufacturers are facing shipment and inventory pressure, so individual significantly loose to promote new single transactions. Specifically, the price in the northeast rose to 2250-2430 yuan/ton. Prices in North China fell to 2,280 to 2,610 yuan/ton. The price in Northwest China fell to 2510-2520 yuan/ton. The price in southwest China is stable at 2450-3000 yuan/ton. The price in East China fell to 2480-2530 yuan/ton. In central China, the price of small and medium-sized particles fell to 2490-2700 yuan/ton, and the price of large particles fell to 2570-2630 yuan/ton. The price in South China fell to 2650-2720 yuan/ton.

Future market forecast:

In terms of futures, today's futures price is mainly volatile, and the spot guidance is not strong. From the basic point of view, the supply side, the current industry starts to maintain more than 80%, the daily output is more than 170,000 tons, and the new factory orders are reduced in the short term, and the supply pressure is gradually emerging. On the demand side, farmers need to enter the seasonal gap period, and the downstream inquiries are increasingly rare, although the mainstream quotation is adjusted downward to promote the receipt of orders, but the effect is not obvious. Downstream compound fertilizer plants, plywood plants to maintain just need to replenish, the overall demand is weakening. Yesterday, we mentioned that the price of the two markets is moving towards a high level in the last cycle, and the printing price and volume are called the key factors determining the domestic market trend. The emotional side is only a short-term impact, boils down to the market supply and demand affect the market. In recent days due to the positive market is not clear, it is expected that in the short term the urea market is mainly weak down.