Urea Daily Review: Demand-Side Support Drives Continued Price Increases

Domestic Urea Price Index:

According to FeiDuoDuo data calculations, on May 8, the price index for small granular urea was 2315.27, an increase of 16.05 from the previous day, a 0.70% rise compared to the previous day, and a 4.11% decrease year-on-year.

Urea Futures Market:

Today, the urea UR409 contract opened at 2120, with a highest price of 2125, a lowest price of 2095, a settlement price of 2112, and a closing price of 2119. The closing price decreased by 40 compared to the previous trading day's settlement price, a 1.85% drop. The day's price fluctuation range was between 2095 and 2125. The basis in Shandong for the 09 contract was 191. The 09 contract saw an increase of 2158 open positions, with a total of 240,623 open positions currently.

The significant decline in urea futures prices is largely due to the cooling sentiment influenced by top-level controls, rather than any significant shift in fundamentals. It is expected that short-term urea futures prices will mainly experience high-level fluctuations.

Spot Market Analysis:

Today, domestic urea market prices continued to rise slightly, supported by strong fundamentals, with enterprises continuing to increase their quotations.

Specifically, prices in the Northeast region rose to 2190-2250 yuan/ton. In the East China region, prices rose to 2290-2340 yuan/ton. In the Central China region, small granular prices increased to 2300-2420 yuan/ton, while large granular prices decreased to 2260-2310 yuan/ton. In the North China region, prices rose to 2170-2320 yuan/ton. In the South China region, prices rose to 2350-2480 yuan/ton. In the Northwest region, prices rose to 2280-2290 yuan/ton. In the Southwest region, prices rose to 2260-2650 yuan/ton.

On the factory side, manufacturers continue to ship pre-ordered goods, with recent inventories continuing to decrease, remaining at relatively low levels for the period. New orders are being followed up in small quantities, with the actual transaction center continuing to move upward. On the market side, the trading atmosphere is relatively active, with low-priced goods gradually decreasing. Under the influence of supply and price stabilization policies, trading sentiment is somewhat cautious, with the market outlook influenced by news. Supply-wise, recent daily production in the industry has increased slightly, maintaining above 180,000 tons, though some units have plans to enter maintenance periods soon, which could lead to a decrease in operating rates. On the demand side, agricultural activities are entering peak season, with strong market demand and ongoing fertilizer stockpiling. The industrial sector, particularly high-nitrogen fertilizer production, is in peak season, with increasing factory operating rates and high raw material procurement demand, supporting the demand side.

Overall, the current urea market continues to be supported by just-in-time purchases, pushing transaction centers upward. However, market sentiment remains cautious, with a focus on careful operations. It is expected that short-term urea market prices will experience limited upward movement, remaining stable with slight adjustments.