Daily Urea Review: Market Continues to Improve with Supply Shortfalls

Domestic Urea Price Index:

According to Fertifan data, as of May 14, the domestic urea small granule price index stood at 2362.14, an increase of 21.68 from the previous day, up 0.93% day-over-day, and a 0.33% year-over-year increase.

Urea Futures Market:

Today's urea UR409 contract opened at 2151, reaching a high of 2159 and a low of 2113, settling at 2138, and closing at 2129. The closing price increased by 6 compared to the previous trading day, up 0.28%, with daily fluctuations ranging from 2113 to 2159. The Shandong area basis for the 09 contracts was 251; today, the 09 contracts saw a decrease of 5078 positions, with a current holding of 239678 positions.

Today's urea futures prices maintained narrow fluctuations, with some funds withdrawing during the session influenced by the overall market environment. Recently, the fundamental aspects of the urea market have not shown significant changes, and bullish expectations in the spot market remain unchallenged, supporting strong prices. However, regulatory factors make it difficult to imagine much room for price increases, and there is currently a lack of new drivers to lead the market, likely maintaining fluctuations in the short term.

Spot Market Analysis:

Today, the domestic urea market trend continued to rise steadily, with market prices increasing under favorable supply and demand conditions, making price declines challenging.

Specifically, prices in the Northeast region rose to 2270-2320 yuan per ton. In the East China region, prices increased to 2330-2400 yuan per ton. In the Central China region, small granule prices rose to 2320-2420 yuan per ton, and large granule prices to 2300-2360 yuan per ton. In the North China region, prices rose to 2220-2400 yuan per ton. In the South China region, prices increased to 2390-2460 yuan per ton. In the Northwest region, prices rose to 2330-2340 yuan per ton. In the Southwest region, prices increased to 2280-2700 yuan per ton.

Factory Side:

Factories continued to dispatch pre-received orders, with a small amount of new orders following, and businesses reducing inventory. Short-term shipments were pressure-free, and quotations were firmly adjusted upward. Market-wise, the trading atmosphere was acceptable, and although the activity level of new orders was not as high as in earlier periods, the current spot market situation remained strong, showing a robust fundamental performance with continuously rising prices. On the supply side, enterprises with planned maintenance gradually shut down, with industry startups and daily production continuing to decline, leading to a tight spot market supply, which is favorable. On the demand side, essential downstream demand continued, with a cautious purchasing mentality predominating due to high market prices, leading to moderate follow-up.

Overall:

The current urea market is tight, with rising prices forming favorable conditions and supporting an upward price trend. It is expected that the urea market atmosphere will continue for a short time, with prices undergoing high-level adjustments.