Urea Daily Review: Anticipated Supply Reduction Boosts Market Sentiment, Favorable Atmosphere for Low-Price Trading

Domestic Urea Price Index:

According to Feidoodoo data, on November 28, the urea small particle price index was 2524.23, a decrease of 9.68 compared to yesterday, a 0.38% decrease on a daily basis, and a 10.64% decrease year-on-year.

Urea Futures Market:

The opening price of today's urea UR2401 contract was 2292, with the highest at 2336, the lowest at 2287, the settlement price at 2311, and the closing price at 2312. Compared to the previous trading day's settlement price, it increased by 38, a 1.67% increase. The full-day fluctuation range was 2287-2336. The 01 contract price difference in Shandong was 118. Today, the 01 contract reduced its position by 4674 lots, with a current holding of 196929 lots.

Spot Market Analysis:

Today, domestic urea prices showed mixed trends, with overall fluctuations being regionalized. In areas with good market transactions, prices were mostly adjusted upward with controlled orders, while in regions with fewer new orders, prices were stabilized with limited adjustments.

Specifically, prices in the Northeast region fell to 2510-2550 RMB/ton. Prices in North China dropped to 2340-2560 RMB/ton. Northwest prices decreased to 2470-2480 RMB/ton. Southwest prices declined to 2480-2800 RMB/ton. Prices in East China rose to 2420-2480 RMB/ton. In Central China, prices for small particles fell to 2420-2650 RMB/ton, while prices for large particles remained stable at 2580-2660 RMB/ton. Prices in South China dropped to 2620-2650 RMB/ton.

Market Forecast:

On the factory side, some manufacturers, with ample orders received during the previous low-price period and sufficient pending orders, are controlling orders under no significant sales pressure. Current factory prices are mostly firm. Some enterprises with fewer transactions have not accepted new orders and continue to lower their quotes. Traders have limited just-in-time needs, and most are engaging in short-term operations to avoid risks, adopting a cautious and observant stance. The market is currently in a state of negotiation between manufacturers. Regarding supply, daily production by enterprises remains high, with plans for reduced production in some units in the future. On the demand side, agricultural demand is still in the winter storage gap period. Due to the long winter storage cycle, downstream procurement and reserve attitudes are mainly observant. There are indications of initiating light storage recently, and some traders are waiting for the right time and quantity to enter the market for purchases. In the industrial and compound fertilizer market, the operating rate is relatively low, but there are signs of improvement in the operating rate of some enterprises recently, strengthening urea consumption capacity. Overall, the market sentiment remains cautious.

In summary, the current urea market, boosted by the favorable expectation of production reduction, is in a positive trend. Downstream continues to purchase in small quantities on dips. It is expected that the urea market prices will continue to undergo interval fluctuations in the short term.