Urea Daily Review: Increased Supply Expectations, Cautious Purchasing Demand by Traders

Domestic Urea Price Index:

According to Feidoodoo data calculations, on January 23, the urea small granules price index was 2252.73, a decrease of 31.64 from the previous day, down 1.38% day-on-day, and a 19.33% decrease year-on-year.

Urea Futures Market:

Today, the urea UR405 contract opened in 2036, with a high of 2052, a low of 2015, a settlement price of 2034, and a closing price of 2019. The closing price decreased by 33 compared to the previous trading day, down 1.61%, fluctuating between 2015-2052 throughout the day. The 05 contract's basis in the Shandong area was 151. The 05 contract saw an increase of 18,265 hands in positions today, reaching a total of 197,800 hands held.

Spot Market Analysis:

Today, the domestic urea market prices continued their downward trend, with manufacturers continuously lowering quotes. However, the market did not see an improvement in new orders, with a short-term weak market trend.

Specifically, prices in the Northeast region fell to 2210-2260 RMB/ton. In North China, prices fell to 2020-2260 RMB/ton. In East China, prices fell to 2160-2220 RMB/ton. In South China, prices fell to 2330-2390 RMB/ton. In Central China, small and medium granule prices fell to 2150-2380 RMB/ton, and large granule prices fell to 2210-2300 RMB/ton. In Northwest China, prices fell to 2180-2190 RMB/ton. In Southwest China, prices fell to 2250-2800 RMB/ton.

Market Forecast:

On the factory side, manufacturers continue to lower quotes for pre-Spring Festival orders. The current market prices are continuously exploring lower levels, with most factories implementing policies for downstream clients, leading to low-level actual transactions. In the market, transactions have not improved, with low-priced supplies continuing to test the market, maintaining a weak downward trend. On the supply side, there is an expectation of increased supply in the short term, with enterprises that stopped production earlier this week gradually resuming, revealing industry supply pressure. On the demand side, agriculture continues to maintain periodic low-cost purchasing, with a cautious attitude towards reserve demand; industrial compound fertilizer factories continue to see a decline in operation, with a lack of willingness to purchase, leading to a generally just-in-time market performance.

Overall, the current urea market is influenced by an increase in supply, with poor enthusiasm for purchasing downstream, and a cautious wait-and-see attitude. It is expected that urea market prices will maintain stability with minor declines in the short term, with the market undergoing adjustments.