Urea Daily Review: Gradual Recovery in Daily Production, Market Remains Firmly Stable

Domestic Urea Price Index:

According to Feidoodoo data, on May 22, the small granular urea price index was 2401.45, an increase of 3.86 from the previous day, representing a 0.16% day-on-day rise and a 9.30% year-on-year increase.

Urea Futures Market:

Today, the UR409 urea futures contract opened at 2196 yuan/ton, reaching a high of 2235 yuan/ton and a low of 2187 yuan/ton, with a settlement price of 2210 yuan/ton and a closing price of 2192 yuan/ton. The closing price decreased by 9 yuan compared to the previous trading day's settlement, down by 0.41%, with the day's trading range between 2187-2235 yuan/ton. The basis for the 09 contract in the Shandong region was 193 yuan/ton. Today, the 09 contract saw an increase of 5332 lots in open interest, totaling 244,683 lots.

Today's urea futures prices opened high and trended lower, continuing to oscillate at high levels. The current positive factors still provide strong support for urea prices, but forming upward momentum remains unrealistic, and signs of marginal weakening in fundamental support have appeared. However, the overall commodity market environment remains strong, which still influences the sentiment in the urea market. Going forward, urea futures prices may continue to oscillate while waiting for new drivers.

Spot Market Analysis:

Today, domestic urea market prices slightly increased. Enterprises supported by pending orders mostly maintained or slightly increased their quotes, with the industry's daily production slowly recovering and the market operating firmly in the short term.

• Northeast: Prices stable at 2300-2380 yuan/ton.
• East China: Prices rose to 2370-2420 yuan/ton.
• Central China: Small and medium granular prices stable at 2360-2470 yuan/ton, and large granular prices stable at 2320-2380 yuan/ton.
• North China: Prices rose to 2250-2380 yuan/ton.
• South China: Prices rose to 2470-2530 yuan/ton.
• Northwest: Prices stable at 2390-2400 yuan/ton.
• Southwest: Prices stable at 2300-2750 yuan/ton.

On the factory side, transactions were favorable with existing pending orders, reducing immediate shipping pressure. Current quotes remained firm, with some factories continuing to test slight price increases. On the market side, there is a strong wait-and-see atmosphere, with cautious trading, weak high-price transactions, and a lack of low-priced supplies, leading to a stalemate in purchasing atmosphere and a slightly weak consolidation in market conditions. On the supply side, the industry's daily production is gradually recovering but at a slow pace, keeping short-term supply tight. On the demand side, agricultural top-dressing continues but at a slower pace, with weak high-price purchasing; downstream industrial factories purchase cautiously as needed, maintaining a wait-and-see approach, with overall demand follow-up still present.

Overall, the current urea market continues to maintain a firm stance, supported by factories' pending orders and high prices slowing down downstream purchasing. In the short term, urea prices are expected to remain relatively stable with minor fluctuations within a range.