Urea Daily Review: High Prices Lead to Growing Resistance, Market Trading Atmosphere is Weak

Urea Daily Review: High Prices Lead to Growing Resistance, Market Trading Atmosphere is Weak

Domestic Urea Price Index:
According to Fertilizer DuoDuo data estimates, the urea small granule price index on September 11th was 2583.77, down 12.27 from last Friday, a decrease of 0.47% month-on-month, and an increase of 2.95% year-on-year.

Urea Futures Market:
Today's urea UR2401 contract opened at 2122, with a high of 2164, a low of 2116, a settlement price of 2139, and a closing price of 2140. The closing price rose by 35 compared to the settlement price of the previous trading day, an increase of 1.66%. The full-day fluctuation range was 2116-2164, with a price difference of 48; the 01 contract increased its position by 1471 hands today, with a current position of 322,585 hands.

Spot Market Analysis:
Today, the domestic urea market price is largely stable with a slight decline. Most companies' quotations remain stable, while some companies slightly reduced their factory quotations. Overall, there were few new orders, and the market atmosphere was weak.

Specifically, prices in the Northeast region remained stable at 2500-2560 yuan/ton. Prices in North China fell to 2400-2550 yuan/ton. Prices in the Northwest region fell to 2510-2520 yuan/ton. Prices in the Southwest region fell to 2450-2800 yuan/ton. Prices in East China fell to 2590-2620 yuan/ton. In Central China, the price of small granules fell to 2490-2700 yuan/ton, and the price of large granules fell to 2570-2610 yuan/ton. Prices in South China fell to 2600-2720 yuan/ton.

Market Forecast:
In terms of supply, urea is still in a state of low daily production, low inventory, and high basis difference. Additionally, some previously shut down units will resume this week, and there are plans for new units to start production. The capacity utilization rate will increase slightly, and daily production will correspondingly increase. In terms of demand, the downstream market still has a small amount of procurement needs. Agricultural fertilizer preparation work will start this month, and the mindset of downstream dealers to stock up is gradually emerging. However, due to the current high price of urea, the market buys more when prices are low, providing some support for the current domestic consumption of urea. However, due to the small demand, the support is relatively limited.

Overall, production may increase in the coming week, and since the current price is still high, the downstream wait-and-see sentiment is strong. Therefore, it is expected that the spot price of urea will gradually decline slightly in the short term.