Daily Review of Urea: Transportation Obstacles Lead to Loosening Market Prices

Domestic Urea Price Index:
According to Feidoodoo data estimates, on February 21st, the small particle urea price index was 2330.27, a decrease of 3.18 from the previous day, marking a 0.14% drop month-on-month, and a 16.04% decrease year-on-year.

Urea Futures Market:

Today, the UR405 urea contract opened at 2129, reaching a high of 2177 and a low of 2125, with a settlement price of 2151 and a closing price of 2142. The closing price remained unchanged compared to the settlement price of the previous trading day, with a daily fluctuation range of 2125-2177. The basis in the Shandong area for the May contract was 138; today, the May contract saw an increase in positions by 222, reaching a total of 189,100 hands.

Spot Market Analysis:

Today, the domestic urea market prices slightly loosened and adjusted downward, influenced by weather conditions leading to decreased shipments. The current market atmosphere has cooled compared to the previous days, with prices trending downwards for adjustment.

Specifically, prices in the Northeast region remained stable at 2290-2370 yuan/ton. In the North China region, prices rose to 2160-2390 yuan/ton. In the East China region, prices fell to 2250-2310 yuan/ton. In the South China region, prices dropped to 2380-2430 yuan/ton. In the Central China region, small and medium particle prices fell to 2250-2380 yuan/ton, while large particle prices remained stable at 2310-2400 yuan/ton. Prices in the Northwest region remained stable at 2320-2330 yuan/ton. In the Southwest region, prices remained stable at 2300-2600 yuan/ton.

Market Forecast:

From the factory side, new order transactions are average, with most manufacturers facing no pressure on shipments, and continuing to hold firm quotations, which are adjusted based on the number of pending orders. On the market side, recent weather conditions have slowed down shipments, leading to a weaker market trading atmosphere and a downward shift in the overall transaction negotiation focus. In terms of supply, industry supply remains high, with plant operation rates maintained at around 87%. Regarding demand, market demand has slowed down in the short term due to weather conditions, with agricultural market shipments weakening compared to earlier periods, while industrial market demand is still slowly increasing. The compound fertilizer market has expectations for continued improvement, with an increase in lower-end transactions and high-priced transactions facing obstacles, leading to actual transaction prices gravitating towards the lower end.

In summary, with high supply levels in the current urea market, compounded by weather-related transportation obstacles, the market atmosphere has cooled. It is expected that the urea market prices will continue to undergo weak adjustments in the short term, maintaining overall stable operation.