Daily Urea Review: Market Fear of Heights Evident, Downstream Purchasing Slows

Domestic Urea Price Index:

According to Feidoodoo data, on April 16th, the small granule urea price index stood at 2224.09, up by 0.91 from yesterday, a marginal increase of 0.04%, and a year-on-year decrease of 14.27%.

Urea Futures Market:
Today, the urea UR409 contract opened in 1987, peaked in 2002, dipped to the lowest in 1962, settled in 1979, and closed in 2001. The closing price was up by 7 compared to the previous trading day, marking an increase of 0.35%, with the daily range between 1962 and 2002. The Shandong area basis for the September contract was 179; the September contract increased by 12,578 positions today, with current holdings at 258,796.

Spot Market Analysis:

Today, domestic urea market prices slightly increased. After enterprises adjusted their quotes upward, market follow-up slowed, with current quotes mostly stable and firm, reflecting a wait-and-see attitude.

Specifically, prices in the Northeast region remained stable at 2200-2260 yuan/ton. Prices in the East China region were steady at 2170-2220 yuan/ton. In Central China, prices for small and medium granules dropped to 2140-2300 yuan/ton, while large granules remained stable at 2180-2220 yuan/ton. Prices in North China dropped to 2020-2220 yuan/ton. In South China, prices dropped to 2300-2360 yuan/ton. Prices in the Northwest region remained stable at 2190-2200 yuan/ton. In the Southwest region, prices rose to 2100-2500 yuan/ton.

Market Forecast:

From the factory perspective, market transactions have increased recently, and manufacturers' order intake has improved. With pending orders supporting current quotes, they remain firm and stable, with some manufacturers continuing to raise ex-factory prices, leading to further price increases in the market. In the market context, recent export policy news has stimulated trading activity. Still, as domestic quotes continue to rise, traders' enthusiasm to follow higher prices has slowed, leading to a weaker transaction atmosphere. On the supply side, this week saw an increase in the number of enterprise malfunctions and maintenance, slightly reducing daily production and decreasing supply, which positively impacts the market situation, limiting any potential price decline. On the demand side, overall market demand remains weak; as prices continue to rise, downstream buyers are slowing their follow-up, with purchases largely driven by essential needs and maintaining a just-in-time approach, resulting in weak high-price transactions.

Overall, after significant upward adjustments in urea market prices, market follow-up has slowed, with downstream buying attitudes focusing on essential low-price restocking, showing little enthusiasm for following high prices. Influenced by market sentiment, it is expected that urea prices will have difficulty continuing to rise in the short term, likely undergoing a period of consolidation.