Urea Daily Review: Indian Tender Quantity Reduction Weakens International Market Trends

Domestic Urea Price Index:

As estimated by Feidoodoo data, on April 9, the price index for small particle urea was 2150.59, marking an increase of 6.36 from the previous day, a 0.30% rise on a day-to-day basis, and a 17.59% decrease year-on-year.

Urea Futures Market:
Today, the urea UR409 contract opened in 1846, with a high of 1868, a low of 1834, a settlement price of 1854, and a closing price of 1863. The closing price was down by 38 compared to the settlement price of the previous trading day, showing a 2.00% decrease, with a daily fluctuation range between 1834 and 1868. The May contract had a Shandong area basis of 207; today, the May contract saw an increase of 40,879 hands, reaching a total of 236,198 hands in open interest.

Spot Market Analysis:

Today, the domestic urea market saw a continuation of moderate price increases, with manufacturers’ quotations showing minor adjustments, mainly maintaining stability.

Specifically, prices in the Northeast region increased to RMB 2120-2210 per ton. In the East China region, prices rose to RMB 2060-2130 per ton. In the Central China region, prices for small and medium particles increased to RMB 2070-2300 per ton, while large particle prices remained stable at RMB 2160-2200 per ton. Prices in the North China region increased to RMB 1950-2160 per ton. In the South China region, prices decreased to RMB 2220-2260 per ton. Prices in the Northwest region remained stable at RMB 2090-2100 per ton. In the Southwest region, prices increased to RMB 2070-2450 per ton.

From the Factories' Perspective:
Today, the volume of new orders for manufacturers decreased. There is short-term support from pending orders, leading to no pressure on current shipments, with factory quotations largely continuing to remain stable, some increasing, and a few companies making slight reductions. The market is adjusting. Market-wise, domestic trends rebounded from lows post-holiday, but today, influenced by news, market follow-ups slowed down, loosening domestic market transaction sentiments and leading to a stagnant market atmosphere. Supply-wise, daily industry production continued at high levels, with supply still maintaining over 80%. On the demand side, there are signs of a slowdown in market demand, with compound fertilizer factories experiencing poor order placement, leading to a weak market difficult to retreat from, focusing on inventory reduction and limited follow-up in raw material procurement. Internationally, the reduction by half in the number of Indian tenders weakened the international market, impacting the domestic market and putting pressure on future domestic exports.

Overall View:
Currently, with the support of pending orders, urea enterprises maintain a firm attitude. Downstream follow-up continues to be difficult, limiting market rebound potential. Combined with the impact of the sentiment around international tenders, it is anticipated that in the short term, urea market prices will continue to make slight exploratory increases before stabilizing.