Urea Daily Review: Downstream Purchases Predominantly Replenish on Declines, Export Benefits Not Evident Yet

Domestic Urea Price Index:

According to Fertilizer Duo Duo data calculations, on January 8th, the urea small granule price index was 2388.32, down by 19.09 from last Friday, a 0.79% decrease week-on-week and a 14.22% decrease year-on-year.

Urea Futures Market:

Today, the urea UR405 contract opened at 2150, with a high of 2150, a low of 2048, a settlement price of 2090, and a closing price of 2048. The closing price is 112 less than the previous trading day's settlement price, down by 5.19%, with a daily fluctuation range of 2048-2150. The Shandong region's basis for the 05 contract is 262. The 05 contract increased its positions by 9536 hands today, with a total of 173,300 hands held currently.

Spot Market Analysis:

Today, the domestic urea market prices are adjusting downwards, with many factory quotations holding steady and showing a relatively firm mentality. Some factories slightly reduced their prices to make concessions.

Specifically, prices in the Northeast region are stable at 2380-2420 yuan/ton. Prices in the North China region fell to 2160-2420 yuan/ton. Prices in the East China region dropped to 2300-2380 yuan/ton. Prices in the South China region fell to 2450-2500 yuan/ton. Prices for small and medium granules in the Central China region decreased to 2280-2450 yuan/ton, and large granules dropped to 2470-2500 yuan/ton. Prices in the Northwest region are stable at 2350-2360 yuan/ton. Prices in the Southwest region are stable at 2350-2800 yuan/ton.

Future Market Forecast:

On the factory side, many pending orders are waiting to be shipped, and inventory is decreasing. Current quotes are relatively firm, with some factories holding prices steady or slightly decreasing, showing a strong willingness to maintain prices. In the market, influenced by the decline in the board and high resistance sentiment, recent market transactions have slowed down, with limited capability to follow high prices, resulting in a dull trading atmosphere. In terms of demand, agriculture is in its off-season for fertilizer use, with only some areas in Central China having a demand for wheat top-dressing. Downstream compound fertilizer shipments are poor, with factories cautious in receiving goods. The current startup of compound fertilizer enterprises has slightly decreased, and their demand is relatively stable. Regarding Indian tenders, the latest shipment date for this tender is February 29, with 21 suppliers offering a total of 2.7173 million tons. The lowest CFR price for the west coast is 316.8 USD/ton, and for the east coast is 329.4 USD/ton. Current export controls still exist, and with international prices being low, domestic enterprises show weak interest in participating in this Indian tender, expecting a minimal short-term impact on the domestic market from these tenders.

Overall, current urea enterprises are primarily executing pending orders, with downstream purchases predominantly replenishing on declines. Additionally, export benefits are not evident yet. It is expected that in the short term, urea market prices will continue to adjust, facing difficulties in rising.