Urea Daily Review: Emergence of Downstream Restocking Demand Leads to Improved Market Atmosphere

Domestic Urea Price Index:

According to Fei Duoduo's data, as of January 2nd, the urea small particle price index is 2392.27, an increase of 1.36 from last Friday, showing a 0.06% increase week-over-week and a 13.49% decrease year-over-year.

Urea Futures Market:

Today's urea UR405 contract opened at 2117, reaching a high of 2150 and a low of 2085, with a settlement price of 2120 and a closing price of 2130. This closing price represents an increase of 22 from the previous trading day's settlement, marking a 1.04% rise, with daily fluctuations ranging from 2085 to 2150. In the Shandong region, the 05 contract basis is 180; today, the 05 contract decreased by 4 hands, with current holdings at 178,500 hands.

Spot Market Analysis:

Today, the domestic urea market prices have slightly increased, with most manufacturers holding steady prices. In parts of East and South China, prices have seen a minor uptick, and market transactions continue from pre-holiday levels.

Specifically, in the Northeast region, prices are stable at 2350-2440 yuan/ton. In North China, prices have fallen to 2160-2420 yuan/ton. In Northwest China, prices are stable at 2320-2330 yuan/ton. In Southwest China, prices are steady at 2350-2800 yuan/ton. In East China, prices have risen to 2280-2360 yuan/ton. In Central China, small particle prices have fallen to 2290-2550 yuan/ton, while large particle prices are stable at 2410-2460 yuan/ton. In South China, prices have dropped to 2450-2500 yuan/ton.

Market Forecast:

From the factory perspective, manufacturers are generally accepting lower-priced orders. Some businesses are processing pre-holiday pre-received orders with satisfactory pending shipments. Influenced by positive market demand, some businesses have slightly raised their prices, leading to regionalized market pricing. In the market, the shipping situation has significantly improved compared to pre-holiday levels, with a slight rebound in transactions and increased orders. On the supply side, there is no immediate expectation of an increase in industry operation rates, with supply continuing to fluctuate at low levels. In terms of demand, as production limits end, market demand gradually emerges. The industrial compound fertilizer sector plans to resume production, and agriculture is also experiencing periodic demand for fertilization, with market demand orderly following suit.

In summary, the current urea market atmosphere has significantly improved compared to earlier periods, with emerging downstream demand and low-level industry supply. It is expected that the urea market prices will operate with fluctuations in the short term.