August 24 Urea Daily Review: Bullish and Bearish Factors Intertwine as the Market Consolidates Volatily

 

According to Feidoodoo data, the small-granular urea price index was 1,772.73 on August 24, down 5.00 from the previous working day, down 0.28% month on month and down 1.07% year on year.

 

 

Today, the UR2701 urea contract opened at 1,770, reached a high of 1,786 and a low of 1,762, settled at 1,775, and closed at 1,777. The closing price was 5 yuan higher than the previous trading day's settlement price, up 0.28%. The January contract's basis in Shandong was -77 yuan/tonne. Open interest in the January contract increased by 5,483 lots today to 243,822 lots.

 

Urea futures continued to trade in a volatile but firmer pattern today. The conclusion of India's tender boosted port accumulation and effectively diverted domestic supply, easing shipment pressure at factories. At the same time, an increase in plant maintenance in late August led to a marginal decline in daily output. The combination of exports and maintenance lifted the futures price benchmark. Intraday rumors that a third batch of export quotas would soon be released briefly improved sentiment, but the information has yet to be verified.

 

Although exports have provided phased support, domestic fundamentals have not reversed materially. On the demand side, agricultural demand is in the off-season, while compound fertilizer and industrial buyers are purchasing only for rigid demand, leaving domestic demand weak. On the supply side, supply has tightened marginally, but overall availability remains ample and high inventories continue to limit upside room. On the spot side, downstream acceptance weakened after prices rose, and some producers slightly lowered quotations.

 

Overall, urea futures remain firm under dual support from export positives and maintenance expectations, and market sentiment has improved. However, weak domestic demand and high inventories limit upside potential. The market may maintain a relatively firm but volatile pattern in the short term. Attention should focus on the actual pace of export fulfilment, the implementation of plant maintenance, and the timing of autumn fertilizer procurement.

 

 

The domestic urea spot market traded in a stalemate with a weak bias today. Recently, large orders from India's tender led factories to concentrate shipments to ports. Exports temporarily diverted domestic supply and eased factory shipment pressure. Quotations in major producing regions rose noticeably, while stronger futures increased producers' willingness to support prices. However, weak domestic demand fundamentals have not improved. Agricultural demand has entered the off-season, and downstream compound fertilizer and melamine producers are purchasing only for rigid demand, with no incremental buying. Transactions did not follow up sufficiently after prices rose, leaving the market in a stalemate.

 

On the supply side, concentrated maintenance in late August has brought daily output down from high levels and tightened supply marginally. However, industry operating rates remain relatively high and overall supply is ample. Factory inventories have declined slightly through port accumulation, but total inventories remain high. Overall, downstream demand is unlikely to improve materially. The export-driven rebound remains a phased positive factor, and the market lacks sustained upward momentum before the fundamentals of strong supply and weak demand reverse materially. The market may remain volatile in the short term. Attention should focus on the actual pace of export fulfilment and the start of autumn fertilizer procurement.

 

Overall, the domestic urea spot market is maintaining a volatile pattern. On the supply side, industry operating rates remain high, supply is ample, and inventory pressure continues to accumulate. However, some producers plan maintenance shutdowns and output reductions in late August, while export shipments remain smooth, providing marginal support to the spot market. Stronger futures prices are also reinforcing producers' willingness to support prices. On the demand side, agricultural topdressing demand remains regionally differentiated and has not generated concentrated procurement. Industrial demand is limited to rigid-demand buying, compound fertilizer operating rates remain low, downstream buyers are cautious, and transaction volumes remain limited. The core contradiction of loose supply-demand fundamentals has not been materially reversed. Upward momentum is mainly coming from expectations of supply reductions and export diversion. Attention should remain on the implementation of maintenance-related output cuts, the pace of export order fulfilment, and marginal changes arising from the start of autumn fertilizer procurement.

 

Specifically, prices in Northeast China were stable at 1,790-1,820 yuan/tonne. Prices in East China fell to 1,700-1,720 yuan/tonne. Prices in Central China were stable at 1,720-1,900 yuan/tonne. Prices in North China were stable at 1,580-1,800 yuan/tonne. Prices in South China rose to 1,800-1,850 yuan/tonne. Prices in Northwest China were stable at 1,860-1,910 yuan/tonne. Prices in Southwest China were stable at 1,680-2,000 yuan/tonne.

 

 

August 24: In Guangzhou, Guangdong, the reference delivered price for urea was 1,830-1,840 yuan/tonne, unchanged from the previous working day.

 

August 24: In Nanning, Guangxi, the reference delivered price for urea was 1,800-1,820 yuan/tonne, unchanged from the previous working day.

 

August 24: In Shijiazhuang, Hebei, the reference delivered price for urea was 1,740-1,750 yuan/tonne, broadly unchanged from the previous working day.

 

August 24: In Wen'an, Hebei, the reference delivered price for urea was 1,730-1,740 yuan/tonne, broadly unchanged from the previous working day.

 

August 24: In Shangqiu, mainstream reference prices for small- and medium-granular urea were 1,720-1,740 yuan/tonne, while large-granular urea was quoted at around 1,840-1,850 yuan/tonne.

 

August 24: In Jingmen, mainstream reference prices for small- and medium-granular urea were 1,740-1,750 yuan/tonne. Self-pickup prices at railway terminals were temporarily referenced at around 1,700-1,740 yuan/tonne, while mainstream self-pickup prices for large granules at railway terminals were 1,800-1,810 yuan/tonne.

 

August 24: In Tieling, Liaoning, ex-warehouse/vehicle-loading prices were referenced at 1,780-1,800 yuan/tonne, unchanged from the previous working day.

 

August 24: In Heze, Shandong, the reference delivered price for urea was around 1,700-1,710 yuan/tonne, broadly unchanged from the previous working day.

 

August 24: In Linyi, Shandong, the reference delivered price for urea was 1,700-1,710 yuan/tonne, down 20 yuan/tonne from the previous working day.

 

August 24: In Xianyang, mainstream prices were referenced at 1,800-1,820 yuan/tonne, unchanged from the previous working day.