Daily Urea Review: Strong Support from Pending Shipments Continues to Bolster Firm Price Increases

Domestic Urea Price Index:

According to Feidoodoo data calculations, as of May 13, the urea small granule price index was 2340.45, an increase of 14.27 from the previous working day, up 0.61% month-on-month, and down 1.56% year-on-year.

Urea Futures Market:

Today's urea UR409 contract opened at 2110, reached a high of 2143, a low of 2106, settled at 2123, and closed at 2139, which is an increase of 29 from the previous trading day's settle price, up 1.37%, with daily fluctuations ranging from 2106 to 2143. The September contract's basis in the Shandong region is 211; today, the September contract saw an increase of 7760 positions, reaching a total of 244756 positions held.

Currently, there are no significant changes in the fundamental urea market, expectations for supply contraction and demand still exist, and although high prices are suppressed by objective factors, there are no conditions for a significant price drop in the short term, and the market is expected to continue operating with fluctuations.

Spot Market Analysis:

Today, domestic urea market prices continued to rise, with corporate quotations adjusting steadily upwards amid continued supply reductions, supported by pending shipments, leading to firm and rising prices.

Specifically, prices in the Northeast region rose to 2220-2270 yuan/ton. In the East China region, prices rose to 2310-2380 yuan/ton. In the Central China region, small granule prices rose to 2320-2380 yuan/ton, while large granule prices remained stable at 2260-2310 yuan/ton. In the North China region, prices rose to 2190-2390 yuan/ton. In the South China region, prices rose to 2380-2460 yuan/ton. In the Northwest region, prices rose to 2320-2330 yuan/ton. In the Southwest region, prices rose to 2260-2700 yuan/ton.

Factory Aspect:

Factories have had a good reception of orders over the past week, with a large volume of pre-received orders currently being executed on behalf. Firm quotations have been adjusted upwards, and the sentiment is primarily to uphold prices. In the market aspect, the current market prices continue to rise at high levels, with limited enthusiasm for chasing higher prices, leading to cautious follow-up sentiment and a slower pace of purchasing, resulting in a market trading atmosphere that has declined from earlier periods. On the supply side, there are numerous maintenance units this month, and it is expected that many of the businesses under maintenance have already stopped production, resulting in a downward trend in industry startups and continued low daily production, with the market spot supply remaining tight. On the demand side, agricultural demand continues to follow essential needs with limited purchasing; industrial downstream compound fertilizer factories continue to operate at high levels, with sustained industrial demand, and the overall demand situation is good.

Overall:

Currently, the urea market prices are operating at high levels due to strong support from pending shipments, resulting in firm quotations. The downstream continues to show a lack of vigor in following high prices, and it is expected that the urea market will continue to operate firmly at high levels for a short period, with price increases gradually slowing down.