Daily Urea Review: Enterprise Prices Continue to Decline Modestly, Market Sentiment Remains Cautious

Domestic Urea Price Index:

According to Feiduoduo data, on December 26th, the domestic small granule urea price index was 2430.27, a decrease of 25.32 from the previous day, down 1.03% compared to the previous period, and 12.89% lower year-on-year.

Urea Futures Market:

Today, the UR405 urea contract opened in 2075, with a high of 2095, a low of 2065, a settlement price of 2080, and a closing price of 2085. The closing price decreased by 7 compared to the settlement price of the previous trading day, down 0.33%, with a daily fluctuation range of 2065-2095. The Shandong area basis for the 05 contracts was 275, and the 05 contracts saw a decrease of 819 positions, with current holdings at 183,300 hands.

Spot Market Analysis:

Today, the domestic urea market prices continued to decline, with a weak trading atmosphere and no new positive support, leading enterprises to lower their prices to attract new orders.

Specifically, prices in the Northeast region fell to 2420-2470 yuan/ton. In North China, prices dropped to 2200-2470 yuan/ton. In the Northwest, prices fell to 2340-2350 yuan/ton. Prices in Southwest China remained stable at 2450-2800 yuan/ton. In East China, prices fell to 2340-2400 yuan/ton. In Central China, prices for small and medium granules fell to 2320-2580 yuan/ton, and for large granules to 2410-2480 yuan/ton. In South China, prices dropped to 2480-2550 yuan/ton.

Market Forecast:

From the factory perspective, as orders awaiting dispatch gradually decrease, some enterprises continue to slightly lower their prices to attract new orders, indicating there is still room for further price reductions. On the market side, the overall performance is subdued with limited spot transactions and a bearish trend in futures, continuing the low market atmosphere. In terms of supply, most gas-based enterprises have ceased operations for maintenance, reducing market supply, with current supply volumes reaching recent lows. Gas-based enterprises plan to resume production gradually in January next year. Demand-wise, this year's winter storage demand has been delayed, with downstream purchasing sentiment remaining cautious. Besides minimal essential purchases, actual transactions are few; compound fertilizer enterprises are moving goods slowly, leading to a decrease in operating rates and reduced demand for urea.

In summary, current urea market purchasing follows up in small quantities, with a flat trading atmosphere. Enterprises are mostly lowering their prices to attract orders. In the short term, urea market prices are expected to continue in a steady downward adjustment.