Urea Daily Review: Enterprises Lower Prices to Increase Sales, Downstream Purchasing Remains Weak

Domestic Urea Price Index:

According to Feidoodoo data, the urea small granule price index on September 26th was 2556.50, falling by 21.36 from yesterday, a 0.83% decrease MoM, and a 0.12% decrease YoY.

Urea Futures Market:

Today, the urea UR2401 contract opened at 2127, with a highest price of 2163, a lowest of 2121, a settlement price of 2140, and a closing price of 2142, falling by 24 compared to the settlement price of the last trading day, a 1.11% decrease MoM. The total daily fluctuation range was 2121-2163, with a price difference of 42; the 01 contract decreased by 2559 hands today, with a current holding of 308110 hands.

Spot Market Analysis:

Today, the domestic urea market continues to adjust downwards. Shandong and Fujian regions have the largest decrease of 70 yuan/ton, while other regions are stable with slight downward adjustments.

In detail, the price in the Northeast region remains stable at 2540-2620 yuan/ton. The price in North China has fallen to 2320-2590 yuan/ton. The price in the Northwest region remains stable at 2480-2490 yuan/ton. The Southwest region price is stable at 2450-2800 yuan/ton. The price in East China has fallen to 2460-2560 yuan/ton. The price of small granules in Central China has fallen to 2450-2700 yuan/ton, and large granules to 2460-2550 yuan/ton. The price in the South China region has fallen to 2600-2680 yuan/ton.

Market Forecast:

In terms of supply, current installations continue to restart, operating at high daily production levels, with new production capacity about to come online, overall supply is sufficient, and there is an abundance of goods. On the enterprise side, with the National Day holiday approaching, but some enterprises have fewer orders, to ensure sufficient orders during the holiday, most enterprises are lowering their ex-factory prices, intending to decrease profits to increase sales. In terms of demand, downstream purchasing enthusiasm remains weak, the market atmosphere is dull, and new order transactions are sluggish. On the cost side, coal prices began to rise and fall on Monday, ending the upward trend for the time being.

Overall, the current domestic urea market is operating weakly, with no favorable news to stimulate, it is expected that the urea market price will mainly decrease in the short term, and the situation of daily production increase needs to be continuously monitored.