Daily Urea Review: Market Demand Slows Down Due to Sentimental Impact

Domestic Urea Price Index:

According to Feidoodoo data calculations, on February 22, the urea granule price index was 2325.27, a decrease of 5.00 from the previous day, marking a 0.21% drop sequentially and a 16.36% drop year-over-year.

Urea Futures Market:

Today's urea UR405 contract opened at 2145, with a high of 2181, a low of 2139, a settlement price of 2163, and a closing price of 2176. The closing price increased by 25 compared to the last trading day, rising by 1.16%, with the day's fluctuation range between 2139-2181; the 05 contract had a basis of 84 in the Shandong region; the 05 contract saw an increase in open interest by 4113 hands, with current open interest at 193,200 hands.

Spot Market Analysis:

Today, the domestic urea market prices slightly declined, with factory quotations mostly stable with minor adjustments. Under the trend of slowing demand follow-up, the primary adjustment in enterprise factory quotations was weak.

Specifically, prices in the Northeast region remained stable at 2290-2370 RMB/ton. Prices in the North China region dropped to 2160-2390 RMB/ton. In the East China region, prices fell to 2240-2310 RMB/ton. Prices in the South China region dropped to 2380-2420 RMB/ton. In the Central China region, small and medium granule prices remained stable at 2250-2380 RMB/ton, while large granule prices were stable at 2310-2400 RMB/ton. Prices in the Northwest region were stable at 2320-2330 RMB/ton. In the Southwest region, prices remained stable at 2300-2600 RMB/ton.

Market Forecast:

From the factory perspective, manufacturers' quotations continue to run steadily. Due to the current rainy and snowy weather conditions affecting shipments, the market is expected to remain firm in the short term. Regarding the market atmosphere, there's a cooling in trading sentiment, with weaker new deals leading to a temporary weak fluctuation in the market, with prices slightly retracting and transactions maintaining a lukewarm status. On the supply side, the industry's daily production continues at high levels, and the market's bearish sentiment adds pressure to the supply side, curbing price increases. On the demand side, the market's resistance to high prices is gradually becoming apparent, with new order follow-ups slowing down. Additionally, agricultural purchases in the north have weakened due to rainy and snowy weather, and industrial market purchases are slowly recovering, leading to an overall slow follow-up on the demand side.

In summary, current urea factories continue to dispatch pre-received orders with steady quotations, while demand follow-up slows due to sentimental impacts, extending the wait-and-see attitude. It is expected that the urea market prices will remain mostly stable with minor adjustments in the short term, possibly showing a slight downward correction.