Urea Daily Review: Increase in Transactions at the Lower End of the Market, Minor Price Adjustments Upwards

Domestic Urea Price Index:

According to Feidoodoo data calculations, on January 29, the urea small granules price index was 2246.86, an increase of 9.09 from last Friday, up 0.41% week-on-week, and down 20.08% year-on-year.

Urea Futures Market:

Today, the urea UR405 contract opened at 2111, with a high of 2169, a low of 2110, a settlement price of 2141, and a closing price of 2133. The closing price increased by 48 compared to the last trading day, up 2.30%, with a daily fluctuation range of 2110-2169. The 05 contracts in the Shandong region had a basis of 37; today, the 05 contracts decreased their positions by 7685 hands, with current holdings at 183,900 hands.

Spot Market Analysis:

Today, the domestic urea market prices were adjusting upwards, with good receipt of orders at lower prices, indicating an improvement over the previous period.

Specifically, prices in the Northeast region stabilized at 2190-2250 RMB/ton. In North China, prices rose to 2070-2260 RMB/ton. In East China, prices rose to 2150-2230 RMB/ton. In South China, prices rose to 2330-2400 RMB/ton. In Central China, small and medium granule prices rose to 2180-2380 RMB/ton, and large granule prices rose to 2250-2300 RMB/ton. In Northwest China, prices rose to 2170-2180 RMB/ton. In Southwest China, prices remained stable at 2200-2600 RMB/ton.

Market Forecast:

On the factory side, most factories have not yet completed Spring Festival presales, continuing to focus on presale orders. Some factories have received better orders after lowering prices. With support from pending orders, manufacturers have a strong willingness to hold prices, currently making slight upward adjustments to control order intake. On the market side, the market continues to operate weakly and steadily, with an overall relatively weak trading atmosphere, and downstream cautiously observing and following up on low prices. On the supply side, gas-based enterprises are gradually resuming production, with supply steadily rising, daily production gradually increasing, and industry supply pressure gradually becoming apparent. On the demand side, traders are following up on low prices, with downstream just-in-time demand weakening before the Spring Festival, poor shipments of compound fertilizer products, most factories continuing to operate at low rates, and decreased enthusiasm for raw material procurement.

Overall, the current urea market is seeing an increase in transactions at the lower end, with companies quoting lower-end prices experiencing minor increases, and indications of high-end quotes gradually moving towards the lower end. It is expected that the urea market will operate firmly in the short term, with prices mostly stable and minor adjustments.