Daily Review of Urea: Low Enthusiasm for Price Increases Among Downstream Buyers, Market in a Stalemate

Domestic Urea Price Index:

According to data from Feidoodoo, on February 29th, the price index for small granules of urea was 2321.95, a decrease of 1.82 from the previous day, marking a 0.08% decrease on a day-to-day basis and a 16.48% decrease year-on-year.

Urea Futures Market:

Today, the opening price for the urea UR405 contract was 2114, with a high of 2115, a low of 2086, a settlement price of 2101, and a closing price of 2088. The closing price decreased by 50 compared to the settlement price of the previous trading day, marking a 2.34% decrease, with the day's fluctuation range between 2086 and 2115. The basis in the Shandong area for the 05 contract was 162. The 05 contract saw an increase of 9671 lots in open interest, reaching a total of 206,900 lots to date.

Spot Market Analysis:
Today, domestic urea market prices slightly adjusted downward. After the factories' previous price increases, market purchasing slowed down, with current quotations mainly stable, turning the market sentiment weak.

Specifically, prices in the Northeast region rose to 2310-2380 RMB/ton. Prices in the North China region fell to 2120-2380 RMB/ton. Prices in the East China region fell to 2230-2290 RMB/ton. Prices in the South China region remained stable at 2380-2420 RMB/ton. In the Central China region, prices for small and medium granules fell to 2210-2380 RMB/ton, while prices for large granules remained stable at 2280-2400 RMB/ton. Prices in the Northwest region remained stable at 2260-2270 RMB/ton. Prices in the Southwest region remained stable at 2300-2600 RMB/ton.

Market Forecast:
On the production side, factories are experiencing good new order transactions, with current new orders supporting stable factory ex-factory prices and a positive mentality among manufacturers, leading to a wait-and-see approach to price adjustments. In the market, the transaction atmosphere post-price increase appears slightly average, with the market mainly in a wait-and-see state as factories gradually dispatch previously pre-received orders and downstream purchasing slows down. On the supply side, there is an expectation of reduced supply, with current operations still at high levels. On the demand side, agricultural demand has not yet started, with purchasing somewhat stagnant; industrial demand is gradually increasing post-holiday, leading to incremental purchasing and restocking of raw materials, and demand is gradually being released.

In summary, current urea enterprises are holding onto some new orders pending dispatch, with expectations of reduced supply and still room for demand release. However, the enthusiasm among industry players for price increases is not very high, and it is expected that the urea market prices will operate within a stable to slightly narrow range in the short term.