Urea Daily Review: Daily Production Decreases, Market More Likely to Rise Than Fall

Domestic Urea Price Index:

According to the data from "FeiDooDoo", the urea small particle price index on August 24th is 2575.14, an increase of 30.45 from yesterday, up 1.2% month-on-month and 7.39% year-on-year.

Urea Futures Market:

Urea UR2401 contract opened at 2300, with a high of 2338, a low of 2252, a settlement price of 2292, and a closing price of 2255. The closing price increased by 17 compared to the settlement price of the previous trading day, up 0.76% month-on-month. The daily range was 2252-2338 with a price difference of 86. The 01 contract decreased its holdings by 31,169 hands today, with current positions at 324,734 hands.

Spot Market Analysis:

Today, the domestic urea market showed a significant upward trend, with market quotations generally rising. Many regions have consecutively adjusted their quotations upward, and the current urea prices are at a high level.

Specifically, the price in the Northeast region rose to 2450-2520 yuan/ton. In the North China region, it increased to 2440-2630 yuan/ton. The Northwest region saw prices rise to 2540-2550 yuan/ton. Prices in the Southwest region remained stable at 2450-2800 yuan/ton. In the East China region, prices rose to 2550-2620 yuan/ton. In the Central China region, the price of small particles dropped to 2490-2680 yuan/ton, while the large particles rose to 2550-2580 yuan/ton. Prices in the South China region increased to 2630-2750 yuan/ton.

Market Forecast:

On the supply side, due to recent coal accidents and reduced production from the Shanxi Jincheng facility, the current urea market supply is tight. Additionally, with several companies undergoing concentrated maintenance in recent days, current company stock levels are low, and suppliers are holding back sales. On the demand side, the compound fertilizer market currently has a high operating rate. Also, with some crops requiring fertilizers in the fall, the overall market demand remains substantial. Internationally, after the India mark, overseas quotations have been fluctuating downwards. For example, the paper goods in September have been adjusted down to around 360 US dollars/ton in Egypt. As for futures, as of the close on August 23rd, the main contract UR2401 for urea hit the daily limit, rising by 7.03%. Today's urea futures opened high and went higher, with spot quotations following the upward trend, suggesting a short-term strong fluctuation.

In conclusion, with the current demand for the urea market still present and daily production on the lower side, it's expected that the urea market will more likely rise than fall in the short term.