Daily Urea Review: Tight Market Supply Drives Prices Upward, Positive Factors Support Price Rise

Domestic Urea Price Index:

According to Feidoodoo data, as of May 15, the domestic urea small granule price index stood at 2371.82, an increase of 9.68 from the previous day, up 0.41% day-over-day, and a 1.68% year-over-year increase.

Urea Futures Market:

Today, the urea UR409 contract opened at 2129, reached a high of 2141, and a low of 2110, settled at 2127, and closed at 2126. The closing price decreased by 12 compared to the previous trading day, down 0.56%, with daily fluctuations ranging from 2110 to 2141. The Shandong area basis for the 09 contract was 274; today, the 09 contract saw a decrease of 2216 positions, with a current holding of 237462 positions.

Today's urea futures prices primarily showed weak fluctuations, influenced by a 'black swan' event leading to a continued risk-off sentiment in the overall commodity market. The fundamental aspects of urea have limited changes, but the strong atmosphere in the spot market still provides some support for futures prices, and there are no conditions for a significant reversal in urea futures prices in the short term.

Spot Market Analysis:

Today, domestic urea market prices continued to rise, although high-priced downstream follow-ups were somewhat sluggish. Companies supported by pending shipments still quoted prices firmly.

Specifically, prices in the Northeast region rose to 2280-2320 yuan per ton. In the East China region, prices increased to 2370-2430 yuan per ton. In the Central China region, small granule prices rose to 2320-2430 yuan per ton, and large granule prices to 2300-2380 yuan per ton. In the North China region, prices rose to 2230-2410 yuan per ton. In the South China region, prices increased to 2390-2460 yuan per ton. In the Northwest region, prices rose to 2350-2360 yuan per ton. In the Southwest region, prices remained stable at 2280-2700 yuan per ton.

Factory Side:

Recently, factories have seen a limited number of new orders, with limited follow-up. They are currently dispatching pre-received goods, and inventories continue to decline from already low levels. Supported by pending orders, quotations continue to rise firmly. Market-wise, market prices continue to rise, with negotiation focal points moving upwards, resulting in reduced overall transaction activity. The market is predominantly firm. On the supply side, maintenance of facilities is increasing, daily production continues to decline, and industry supply continues to tighten, limiting the quantity of market spot supplies. On the demand side, it is currently the peak season for compound fertilizer production, with downstream factories moderately following up on purchases. However, influenced by high prices, subsequent purchasing momentum may slow down.

Overall:

Currently, the domestic urea market spot supply continues to tighten, with strong supply and demand performance. Companies are executing pending shipments, and the trading atmosphere in the market is active, with trends improving. It is expected that urea prices will consolidate at high levels in the short term, until the positive supply and demand factors dissipate.