Daily Review of Urea: Factory Quotations Continue to Fall, Market Transactions Are Weak

Domestic Urea Price Index:

According to calculations by Feidoodoo, as of March 18, the price index for small granule urea was 2299.68, a decrease of 17.86 from last Friday, a week-over-week drop of 0.77%, and a year-over-year decrease of 17.27%.

Urea Futures Market:

Today's urea UR405 contract opened in 2096, with a high of 2096, a low of 2019, a settlement price of 2049, and a closing price of 2029. The closing price decreased by 94 compared to the previous trading day's settlement price, a week-over-week decline of 4.43%, with the day's fluctuation range between 2019-2096. The 05 contracts had a basis of 211 in the Shandong area; the 05 contracts saw an increase of 8158 lots in open interest, reaching a total of 184496 lots to date.

Spot Market Analysis:

Today, domestic urea market prices continued to decline, with manufacturers reducing their quotations and downstream demand following slowly, resulting in few transactions.

Specifically, prices in the Northeast region dropped to 2270-2330 yuan/ton. In the North China region, prices fell to 2090-2380 yuan/ton. In the East China region, prices decreased to 2230-2280 yuan/ton. In the South China region, prices dropped to 2340-2380 yuan/ton. In the Central China region, prices for small and medium granules fell to 2210-2380 yuan/ton, while large granule prices dropped to 2280-2350 yuan/ton. In the Northwest region, prices remained stable at 2270-2280 yuan/ton. In the Southwest region, prices were steady at 2280-2600 yuan/ton.

Market Forecast:

From the factory perspective, pre-received orders by various factories are maintained at about a week, with factory ex-factory quotations continuing to decline and actual market transactions being weak, indicating a bearish market adjustment. On the market side, the overall transaction atmosphere is depressed, with business confidence lacking and the market primarily operating in a stalemate. On the supply side, the recovery of devices previously under maintenance and an increase in daily production has led to emerging supply pressure. Demand-wise, progress is slow, with downstream maintaining purchases on dips and a continued cautious and watchful trading sentiment. Internationally, India has announced a new round of urea import tenders, with the bidding date set for the 27th of this month and the shipping period until May 20. The current export policy is strictly controlled, making it difficult for domestic participation in this Indian tender.

In summary, current urea factory quotations are continuously falling, with a weak market transaction atmosphere, and the demand side struggling to provide support. It is expected that the urea market prices will continue to adjust weakly in the short term.