Urea Daily Review: Increased New Orders in the Market, Enterprises Maintain Firm Pricing

According to Feidoodoo data, on November 23, the urea small particle price index was 2553.45, an increase of 4.09 from the previous day, a 0.16% increase from the previous day, and a 7.45% decrease year-over-year.

Urea Futures Market:

• Today's opening price for the urea UR2401 contract was 2332, the highest price was 2332, the lowest price was 2291, the settlement price was 2313, and the closing price was 2309. The closing price fell by 8 compared to the settlement price of the previous trading day, a decrease of 0.35%, with a daily fluctuation range of 2291-2332. The Shandong region's basis for the 01 contract was 151. The 01 contract decreased by 11,727 lots today, with current holdings at 235,000 lots.

Spot Market Analysis:

• Today, domestic urea prices have moderately increased, following good new orders in the earlier market period, leading to rising prices from manufacturers. Mainstream enterprises have sufficient pending orders and face no pressure in sales. Currently, new orders in the market are slowing down, putting pressure on rising prices, leading to adjustments.
• Specifically, prices in the Northeast region were stable at 2550-2600 yuan/ton. In North China, prices rose to 2340-2610 yuan/ton. In Northwest China, prices rose to 2510-2520 yuan/ton. In Southwest China, prices remained stable at 2520-2800 yuan/ton. In East China, prices rose to 2440-2500 yuan/ton. In Central China, prices for medium and small particles rose to 2450-2650 yuan/ton, while large particle prices remained stable at 2580-2660 yuan/ton. In South China, prices rose to 2670-2710 yuan/ton.

Market Forecast:

• From the factory side, most manufacturers have received good orders, and pending shipments are plentiful. Currently, enterprises have an average of 6.82 days of pre-received orders, and with no significant sales pressure, factory ex-factory prices are generally firm. In terms of supply, enterprises facing maintenance expectations, such as those in Northwest, Southwest, and Inner Mongolia, may see reduced supply by the end of this month and next month. Currently, the industry's average daily production is about 178,200 tons, with an operating rate of about 80.08%, maintaining a high level of daily production and operation. Regarding the market, the trading atmosphere is gradually improving, with factories seeing better signs in new order transactions. Recent order receipts have been good, leading to price rebounds. In terms of demand, downstream and traders are appropriately following up with purchases, increasing market activity, but the enthusiasm for downstream purchases has decreased with the recent price rebound, leading to a wait-and-see approach.

In summary, although the downstream market has a low willingness to buy at higher prices, given the expected reduction in production by gas-based units, there is still a slight upward price space. It is expected that in the short term, the urea market prices will continue to undergo a minor upward adjustment.