Urea Daily Review: Good New Order Receipt in Southern Region, Prices See Slight Increase

Domestic Urea Price Index:

According to Feidoodoo Index data, on December 13, the small particle urea price index was 2519.23, an increase of 2.73 from the previous day, up 0.11% week-on-week, and down 10.87% year-on-year.

Urea Futures Market:

Today, the urea UR405 contract opened at 2290, with a high of 2301 and a low of 2242. The settlement price was 2270, and the closing price was 2250, down 29 from the previous day's settlement price, a decrease of 1.27%. The day's fluctuation range was 2242-2301; the 05 contract had a basis of 210 in the Shandong area; the 05 contract decreased positions by 3371 hands, with total positions now at 138,200 hands.

Spot Market Analysis:

Today, domestic urea prices adjusted narrowly upwards, with the increase mainly concentrated in the East China region. Some areas had good order receipts, leading to an increase in market transactions and slight price increases, but the overall upward range was small.

Specifically, prices in the Northeast region remained stable at 2500-2530 yuan/ton. In North China, prices dropped to 2330-2540 yuan/ton. In the Northwest, prices were stable at 2460-2470 yuan/ton. In the Southwest, prices remained stable at 2480-2800 yuan/ton. In East China, prices rose to 2460-2510 yuan/ton. In Central China, small and medium particle prices remained stable at 2450-2650 yuan/ton, while large particle prices dropped to 2560-2660 yuan/ton. In South China, prices remained stable at 2590-2640 yuan/ton.

Market Forecast:

From the factory perspective, most factories continue to execute pre-received orders. Currently, some large factories see good order receipts at the lower end of their price range, with an increase in new order transactions, and factories are subsequently adjusting their factory prices upwards. Market-wise, today's market atmosphere is hotter than before, boosting traders' confidence in transactions and warming the overall mood. On the supply side, there is still an expectation of reduced urea market supply. Regarding inventory, this week saw an increase in the inventory of Chinese urea enterprises, with most increases concentrated in the northern region. Northern factories are affected by inconvenient transportation due to rain and snow, leading to slow shipments and an increase in inventory. However, overall inventory levels are still lower than the same period last year, with enterprises slowly accumulating stock. Demand-wise, as the winter storage period approaches, downstream replenishment intentions increase. Today, the market saw an increase in purchasing at lower prices, but a wait-and-see attitude remains.

In summary, the current urea industry price changes are largely influenced by the fundamental supply and demand situation. With today's market showing evident purchasing needs, it is expected that in the short term, urea market prices will largely follow the downstream transaction atmosphere, with a stable to slight adjustment.