Urea Daily Review: Cautious New Order Transactions, Urea Prices Downward Adjustment

Domestic Urea Price Index:

According to Feidoodoo data, as of November 27, the small particle urea price index is 2533.91, down 14.55 from last Friday, a decrease of 0.57% week-on-week, and a 9.87% decrease year-on-year.

Urea Futures Market:

Today, the opening price for the urea UR2401 contract was 2256, with a high of 2306, a low of 2230, a settlement price of 2274, and a closing price of 2285. The closing price rose by 9 compared to the previous trading day's settlement price, a 0.40% increase, with a daily fluctuation range of 2230-2306. The Shandong region basis for the 01 contract is 125. The 01 contract reduced its position by 8652 hands today, with current holdings at 201603 hands.

Spot Market Analysis:

Today, domestic urea prices showed a downward trend. Influenced by the previous decline in futures prices, the market atmosphere has significantly cooled, with average new order transactions.

Specifically, prices in the Northeast region stabilized at 2550-2600 RMB/ton. In North China, prices fell to 2340-2610 RMB/ton. In Northwest China, prices fell to 2470-2480 RMB/ton. In Southwest China, prices stabilized at 2520-2800 RMB/ton. In East China, prices fell to 2410-2460 RMB/ton. In Central China, small and medium particle prices fell to 2430-2650 RMB/ton, while large particle prices stabilized at 2580-2660 RMB/ton. In South China, prices fell to 2640-2660 RMB/ton.

Market Forecast:

Factory side, mainstream enterprise quotes continue to be firm, supported by pending orders. Some factories, influenced by the gradual decrease in pending orders, have loosened their prices, leading to downward adjustments. On the supply side, enterprises maintain high daily production amidst shipments and inventory accumulation. This week, some gas-based plants have stopped operations, with the specific duration of the shutdown being a key factor affecting supply. In the market, after several days of increases in the latter half of last week, a fear of high prices emerged among traders, weakening the market atmosphere and slowing overall purchasing. On the demand side, agricultural needs remain in a lull, while compound fertilizer companies show signs of increased operations, strengthening their urea consumption capacity. With intentions to start light storage recently, some traders wait for the right time and quantity to enter the market. However, resistance to high prices persists, and under the influence of supply and price stabilization policies, downstream chasing of high prices is limited, with some traders entering a temporary wait-and-see mood.

Overall, considering the positive impact of reduced production and the negative impact of supply-demand on the urea market, the market price trend is at a stalemate. It is expected that in the short term, the urea market prices will continue to undergo minor fluctuations and adjustments.