September 3 Urea Daily Review: Firm Costs and Export Expectations Support a Relatively Strong Market

 

According to Feidoodoo data, the domestic small-granular urea price index stood at 1,763.18 on September 3, up 3.18 from the previous working day, up 0.18% month on month and unchanged year on year.

 

 

 

The UR2701 urea contract opened at 1,780 today, reached a high of 1,809 and a low of 1,773, settled at 1,787 and closed at 1,778. The closing price was down 3 from the previous trading day's settlement price, or down 0.17%. The basis for the January contract in Shandong was -68. Open interest in the January contract increased by 3,015 lots today to 268,353 lots.

The urea futures market rose and then retreated, before fluctuating within a narrow range. On the cost side, coal prices remained firm, continuously raising urea production costs and providing solid downside support for futures prices. Export orders are gradually entering the port-consolidation and loading stage, while export expectations continue to affect market sentiment. Expectations for a new Indian tender and overseas geopolitical developments have also driven volatility in international fertilizer markets, providing a temporary sentiment boost to futures. Meanwhile, expectations for autumn fertilizer stocking demand have supported market sentiment to some extent.

However, fundamental pressure remains prominent. Industry operating rates remain high, market supply is ample and producer inventories are being drawn down slowly, while the loose supply situation has not changed. On the demand side, agricultural top-dressing is in a seasonal gap, and stocking of base fertilizer for autumn wheat has not fully begun. Grassroots distributors remain cautious in their purchasing. Downstream compound fertilizer producers and industrial users continue to purchase as needed, mainly through small rigid-demand orders. Overall transaction volumes remain limited, and actual demand cannot provide sustained, substantive support to futures prices. Overall, the market remains in a stalemate: cost support and export expectations provide downside protection, while high inventories and weak demand limit the room for a rebound. Attention should focus on the implementation pace of autumn fertilizer stocking, actual port loading progress and marginal changes in industry inventories.

 

 

 

The domestic urea spot market was stable to firmer today. Export sentiment and continuing strength in coal prices raised urea production costs, providing downside support to market valuations. New-order transactions improved at producers in some major regions, market trading sentiment warmed from earlier levels, downstream buyers mainly followed rigid demand, and some producers raised quotations slightly on the support of pending orders.

However, most supportive factors remain at the expectation stage, while fundamental pressure remains prominent. Although industry operating rates have declined, they remain relatively high overall. Market supply is ample and producer inventories are being digested slowly. On the demand side, agricultural top-dressing is in a seasonal gap, while compound fertilizer producers and downstream industrial users continue to operate at low rates. Procurement is mainly limited to small rigid-demand orders, with limited transaction volumes and insufficient substantive support for the market. Overall, the market is in a stalemate between cost support and export expectations, while high inventories and weak demand constrain upside potential. It is expected to remain range-bound within a narrow range in the short term. Attention should be paid to the implementation pace of export policies, cost-side price movements and the start of autumn fertilizer stocking.

Overall, the domestic urea spot market remains stable to firmer. On the supply side, industry operating rates remain high, market supply is generally ample and producer inventories are being digested slowly. However, concentrated plant maintenance has marginally reduced daily output from high levels, while port consolidation has diverted part of the domestic-trade supply, easing short-term supply pressure to some extent. On the demand side, agricultural top-dressing is in the seasonal low-demand period at the end of summer. Compound fertilizer producers and downstream industrial users remain constrained by high finished-product inventories, continue to operate at low rates and mainly make small rigid-demand purchases. Overall transaction volumes remain limited and provide insufficient substantive support. Fundamentals remain in a stalemate between bullish expectations and bearish realities. Upward drivers mainly stem from higher valuations due to stronger coal prices and sentiment support from continuing export news, but a substantive reversal of the loose supply-demand balance will require clearer fundamental changes. Attention should focus on the implementation pace of export policies, the realization of maintenance-related output cuts and marginal changes brought by the start of autumn fertilizer stocking.

Specifically, prices in Northeast China were stable at 1,780-1,800 yuan/tonne. Prices in East China increased to 1,700-1,760 yuan/tonne. Prices in Central China increased to 1,710-1,900 yuan/tonne. Prices in North China were stable at 1,570-1,800 yuan/tonne. Prices in South China were stable at 1,760-1,820 yuan/tonne. Prices in Northwest China were stable at 1,860-1,910 yuan/tonne. Prices in Southwest China were stable at 1,660-2,000 yuan/tonne.

 

 

 

September 3: The reference delivered urea price in Guangzhou, Guangdong was 1,800-1,820 yuan/tonne, unchanged from the previous working day.

September 3: The reference delivered urea price in Nanning, Guangxi was 1,760-1,770 yuan/tonne, unchanged from the previous working day.

September 3: The reference delivered urea price in Shijiazhuang, Hebei was 1,700-1,750 yuan/tonne, up 10 yuan/tonne from the previous working day.

September 3: The reference delivered urea price in Wen'an, Hebei was 1,720-1,750 yuan/tonne, up 20 yuan/tonne from the previous working day.

September 3: The mainstream reference price for small- and medium-granular urea in Shangqiu was 1,690-1,720 yuan/tonne, while large-granular urea was quoted at around 1,840-1,850 yuan/tonne.

September 3: The mainstream reference price for small- and medium-granular urea in Jingmen was 1,710-1,720 yuan/tonne. Station self-pickup prices were temporarily referenced at around 1,670-1,700 yuan/tonne, while large-granular urea station self-pickup prices were mainly 1,800-1,810 yuan/tonne.

September 3: The ex-warehouse/truck-lift reference price in Tieling, Liaoning was 1,770-1,790 yuan/tonne, unchanged from the previous working day.

September 3: The reference delivered urea price in Heze, Shandong was around 1,700-1,720 yuan/tonne, up 10 yuan/tonne from the previous working day.

September 3: The reference delivered urea price in Linyi, Shandong was 1,700-1,710 yuan/tonne, up 10 yuan/tonne from the previous working day.

September 3: The mainstream reference price in Xianyang was 1,800-1,820 yuan/tonne, unchanged from the previous working day.