Daily Urea Review: Factories Have Ample Pending Orders, Holiday Sales Pressure Eased

June 12, 2024, 9:21 AM

Feidoodoo

3143

Guide

Highlights at a glance

The domestic urea market remained firm on April 28, with the small particle urea price index at 2250.14, up 0.91 from the previous day and rising 0.04% week-on-week, though still 7.87% lower year-on-year. Prices continued to climb across most regions despite a slight slowdown in transaction pace. Factories reported strong pending orders and minimal sales pressure, supporting high and stable quotations. Notable price increases were seen in East, Central, North, and South China, while Northwest prices declined and Northeast/Southwest remained stable. Supply is gradually recovering as maintenance units resume operations, but overall output remains below last year’s levels, with inventories declining. With summer fertilizer production underway, downstream compound fertilizer plants are actively restocking, boosting demand. Positive market sentiment and solid order books support short-term price resilience, suggesting urea prices will likely remain range-bound at elevated levels in the near

Domestic Urea Price Index:

According to Feidoodoo data, on April 28, the domestic small particle urea price index was 2250.14, an increase of 0.91 from the previous working day, a 0.04% rise week-over-week, and a 7.87% decline year-over-year.

Spot Market Analysis:
Today, domestic urea market prices continued to rise, although the transaction pace slightly slowed. Mainstream factories have ample pending orders and currently face no sales pressure, keeping quotations high and firm.

Specifically, prices in the Northeast region remained stable at 2160-2230 yuan/ton. Prices in the East China region rose to 2240-2280 yuan/ton. Prices for small and large particles in the Central China region rose to 2250-2350 yuan/ton and 2260-2280 yuan/ton, respectively. North China prices increased to 2120-2230 yuan/ton. South China prices rose to 2300-2400 yuan/ton. Northwest prices dropped to 2030-2120 yuan/ton. Southwest prices remained stable at 2180-2550 yuan/ton.

Factory Perspective:
Factories are receiving a large volume of orders, with pre-orders gradually accumulating. Supported by ample pending shipments, and despite the upcoming May Day holiday, most manufacturers face little short-term sales pressure, focusing instead on high-level price adjustments. On the market front, recent transactions have steadily increased, fostering a positive trading atmosphere. Under the influence of bullish market sentiment, there is a strong motivation to maintain prices. Supply-side, facilities previously under maintenance are progressively coming back online, slightly increasing daily production. More maintenance is planned for next month, but the current industry supply remains relatively loose compared to the same period last year, and corporate inventories continue to trend downward. On the demand side, as the season for summer fertilizer production begins, the market's capacity to consume raw urea increases, with downstream compound fertilizer factories actively restocking at low prices, fostering a good follow-up atmosphere.

Overall View:
Currently, urea factories are experiencing eased sales pressure, supported by ample pending orders, which bolsters their pricing power. Market demand continues to follow essentially, and urea market prices are expected to maintain high-level adjustments in the short term.

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