October 9 Urea Daily : Low Indian Tender Price Weighs on Urea Futures and Spot

Urea Price Index:

According to FDD data, the urea small-granule price index on October 9 stood at 1,785.00, down 0.00 from the previous working day, unchanged at 0.00% month-on-month, and up 7.97% year-on-year.

Urea Futures Market:

Today, the UR2701 contract opened at 1,759, with a high of 1,762, a low of 1,730, a settlement price of 1,743, and a closing price of 1,733. The closing price was 36 lower than the settlement price of the previous trading day, down 2.04% month-on-month. The basis of the 01 contract in Shandong was +17. The 01 contract added 32,938 lots today, with open interest standing at 259,347 lots as of now.

Urea futures came under pressure and moved lower today, primarily triggered by the low-price result of India's latest tender, which rapidly weakened market sentiment and prompted the futures curve to give back the gains earlier driven by export expectations. The tender price is unlikely to provide effective support to domestic sentiment; with the support from the Indian tender and the export side limited, it is difficult for now to have a substantive impact on the supply-demand pattern. Sentiment in some spot regions weakened accordingly, quotes moved weakly steady, and this in turn dragged futures lower. On the supply side, output remains at a high level and corporate inventories have built up, while actual downstream demand is still lacklustre: agricultural fertilizer application is in an off-season gap, and industrial buyers remain cautious in their purchasing. Overall, the fundamentals have shown no substantive improvement. In sum, urea futures remain in a tug-of-war between bullish export expectations and a weak real-world fundamental backdrop, lacking the conditions for a trend, and the curve is likely to continue trading in a narrow range. Going forward, it is necessary to keep tracking actual export volumes, the pace of agricultural fertilizer application, and the release of reserve demand.

Spot Market Analysis:

Today, China's domestic urea spot market was steady with some consolidation. The winning price of India's latest tender was on the low side, falling short of earlier market expectations and exerting some pressure on industry sentiment. Factory selling sentiment diverged: some enterprises still intended to hold prices firm, but amid the news-driven disturbance, quotes in some regions showed signs of loosening in a bid to promote transactions, and the overall upward momentum in the market was somewhat weakened. On the supply-demand fundamentals, overall supply remains fairly ample; on the demand side, autumn agricultural fertilizer demand for urea is relatively limited, the operating rate of compound fertilizer and downstream industrial sectors has improved only modestly, and the release of substantive demand is weak. In sum, the short-term urea market is likely to continue consolidating, with mainstream quotes mostly stable, while individual enterprises may make flexible small adjustments depending on their own order intake and inventory. Going forward, the focus should be on export progress as well as the start-up pace of real demand and reserve demand.

Overall, the domestic urea spot market is currently consolidating with a weak bias. On the supply side, plants that had been under maintenance are gradually resuming, daily industry output has risen, the pressure from available supply is steadily building, and overall supply remains ample. On the demand side, although enterprises have an incentive to take orders and ship ahead of the holiday, end-user demand has shown no clear improvement; downstream buyers are purchasing only to meet essential needs, autumn agricultural fertilizer stocking is limited, the operating rate of compound fertilizer and industry has improved only modestly, and substantive demand remains weak. The market is now in a tug-of-war between cost support and export diversion on the one hand, and ample supply-demand pressure on the other. Short-term prices may still soften and move lower, but the downside may be relatively limited; if prices fall back to low levels, it could trigger a release of bargain-hunting sentiment.

In specific terms, prices in Northeast China held steady at RMB 1,790–1,810/t; East China was lowered to RMB 1,740–1,760/t; Central China held steady at RMB 1,730–1,920/t; North China declined to RMB 1,600–1,800/t; South China rose to RMB 1,820–1,850/t; Northwest China held steady at RMB 1,860–1,910/t; and Southwest China held steady at RMB 1,660–1,900/t.

Urea Small-Granule Market Quotations at a Glance (RMB/t)

Market News & Updates:

Oct 9: The reference delivered price of urea in the Guangzhou market, Guangdong, was RMB 1,830–1,840/t, flat versus the previous working day.

Oct 9: The reference delivered price of urea in the Nanning market, Guangxi, was RMB 1,820–1,830/t, flat versus the previous working day.

Oct 9: The reference delivered price of urea in the Shijiazhuang market, Hebei, was RMB 1,750–1,800/t, broadly flat versus the previous working day.

Oct 9: The reference delivered price of urea in the Wen'an market, Hebei, was RMB 1,750–1,800/t, down RMB 10–20/t versus the previous working day.

Oct 9: In the Shangqiu market, small/medium granules were mainly quoted at RMB 1,730–1,750/t, while large granules were referenced at around RMB 2,040–2,050/t.

Oct 9: In the Jingmen market, small/medium granules were mainly quoted at RMB 1,740–1,750/t, with station self-pickup temporarily referenced at around RMB 1,710–1,720/t, and large granules for station self-pickup mainly at RMB 2,020–2,030/t.

Oct 9: The ex-warehouse/truck-pickup price in the Tieling market, Liaoning, was referenced at RMB 1,780–1,800/t, flat versus the previous working day.

Oct 9: The reference delivered price of urea in the Heze market, Shandong, was around RMB 1,730–1,740/t, broadly flat versus the previous working day.

Oct 9: The reference delivered price of urea in the Linyi market, Shandong, was RMB 1,740–1,750/t, up RMB 10/t versus the previous working day.

Oct 9: The mainstream price in the Xianyang market was referenced at RMB 1,800–1,820/t, flat versus the previous working day.