Urea Daily Review: Industry Supply Continues to Increase, Downstream Follow-Up Remains Slow

Domestic Urea Price Index:

According to Feidoodoo data calculations, on January 24, the urea small granules price index was 2237.55, a decrease of 15.18 from the previous day, down 0.67% day-on-day, and a 19.88% decrease year-on-year.

Urea Futures Market:

Today, the urea UR405 contract opened in 2017, with a high of 2086, a low of 1996, a settlement price of 2034, and a closing price of 2085. The closing price increased by 51 compared to the previous trading day, up 2.51%, fluctuating between 1996 and 2086 throughout the day. The 05 contract's basis in the Shandong area was 75. The 05 contract saw an increase of 3,299 hands in positions today, reaching a total of 201,100 hands held.

Spot Market Analysis:

Today, the domestic urea market prices continued to decline, with manufacturers' quotes continuing to adjust downwards. However, the market atmosphere remains weak, with prices maintaining a short-term weak trend.

Specifically, prices in the Northeast region fell to 2190-2250 RMB/ton. In North China, prices fell to 2020-2260 RMB/ton. In East China, prices fell to 2140-2200 RMB/ton. In South China, prices fell to 2320-2380 RMB/ton. In Central China, small and medium granule prices fell to 2130-2380 RMB/ton, and large granule prices fell to 2180-2250 RMB/ton. In Northwest China, prices remained stable at 2180-2190 RMB/ton. In Southwest China, prices fell to 2225-2650 RMB/ton.

Market Forecast:

On the factory side, some mainstream regional manufacturers continue to lower quotes to attract orders. However, there has been no significant improvement in new order transactions, with mainstream regions struggling to attract orders through price reductions, leading to increased enterprise inventories and pressure on shipments. In the market, trader sentiment remains weak and fluctuating. Although market prices continue to fall, there has been no clear sign of improvement in market follow-up, with new transactions falling short of expectations. On the supply side, industry supply continues to increase, with a relatively abundant current supply exerting bearish influence, making price increases difficult. On the demand side, downstream operations remain at low levels, with slow follow-up on raw materials and a cautious purchasing attitude, causing the market transaction focus to continuously shift downwards.

Overall, the current urea market prices continue to decline, with traders mostly adopting a wait-and-see approach. If prices continue to fall, it may lead to a certain amount of downstream demand follow-up. It is expected that urea market prices will continue to see stability with minor declines in the short term.