Urea Daily Review, July 30: Indian Tender Fails to Lift the Market, Supply-Demand Conflict Weighs on Urea Prices

Domestic Urea Price Index:

According to FDD data calculations, on July 30, the urea small-granule price index was 1,813.18, down 9.09 from the previous working day, a decrease of 0.50% month on month and an increase of 0.39% year on year.

Urea Futures Market:

Today, the opening price of the urea UR2609 contract was 1,749; the highest price was 1,749; the lowest price was 1,720; the settlement price was 1,730; and the closing price was 1,736. The closing price was down 8 from the previous trading day’s settlement price, a decrease of 0.46%. The basis for the 09 contract in Shandong was +14. Today, open interest in the 09 contract increased by 3,133 lots, with current holdings at 251,854 lots.

Today, urea futures generally fluctuated weakly, with a slight rebound in the afternoon. The 1.7 million-tonne Indian tender was officially announced after yesterday’s close. The earlier market rebound had already partly traded expectations for the Indian tender, and after the expectation was confirmed, the market became more focused on whether it can actually improve domestic exports. For now, the market is waiting to see whether this can lift spot purchasing sentiment.

From a fundamentals perspective, the current supply-demand contradiction remains prominent. Industry capacity utilization remains high, supply continues to be ample, and enterprise inventories continued to accumulate this week, placing persistent pressure on spot prices. Demand is also weak, with slow procurement in both industrial and agricultural sectors, light new order transactions, and an overall weak trading atmosphere.

Overall, before actual export volume is verified, urea futures are likely to continue rangebound fluctuations. The sustainability and height of any rebound still depend on the realization of substantive positive factors. Follow-up attention should focus on export policy changes, the pace of autumn fertilizer stocking, and phased trading opportunities brought by raw material cost fluctuations.

Spot Market Analysis:

Today, China’s domestic urea spot market moved weakly lower. Although the 1.7 million-tonne Indian urea tender was officially announced last night, market sentiment was not effectively boosted, and the market remained sluggish after the tender announcement. Overall market sentiment is cautious.

Today, new order transactions at most enterprises remained weak, the market trading atmosphere was poor, and some enterprises slightly lowered quotations to attract orders. Without actual large-volume positive support, the pattern of high supply and weak demand is difficult to improve. In addition, urea enterprise inventories continued to accumulate this week, and shipment pressure at enterprises continued to increase.

Overall, the supply side continues to operate at high levels. Industry plant operating rates remain relatively high, overall supply is ample, and enterprise inventory pressure remains. On the demand side, agricultural topdressing demand shows clear regional divergence and has not formed concentrated procurement support, making it difficult to open upside room. The industrial side only maintains rigid-demand replenishment, with cautious purchasing sentiment and light overall transactions.

Overall, urea market fundamentals are unlikely to improve significantly in the short term. Without sustained and substantive positive support such as large export orders, the market will struggle to stabilize, and prices are more likely to loosen slightly. Follow-up attention should focus on the progress of agricultural fertilizer demand and export policy trends.

In summary, the current domestic urea spot market is generally in narrow-range consolidation. On the supply side, industry capacity utilization remains high, daily output stays elevated, and the impact of plant maintenance is limited, leaving overall supply pressure relatively heavy. On the demand side, agricultural demand has not yet seen new large-scale fertilizer support, and regional divergence is clear. Industrial demand from downstream compound fertilizer and melamine sectors is weak, procurement is mostly for rigid demand, and overall demand-side driving force is limited. In terms of inventory, enterprise inventories continue to accumulate, and inventory pressure remains. On the export side, expectations exist, but substantive large orders remain limited, and the degree of export diversion still needs to be observed. Going forward, attention should focus on the results of the Indian urea tender, normal changes in exports, and the impact of the autumn fertilizer stocking pace.

By region, prices in Northeast China fell to RMB 1,830-1,860/tonne. Prices in East China were stable at RMB 1,740-1,790/tonne. Prices in Central China were stable at RMB 1,740-1,900/tonne. Prices in North China were stable at RMB 1,650-1,800/tonne. Prices in South China fell to RMB 1,790-1,900/tonne. Prices in Northwest China were stable at RMB 1,860-1,950/tonne. Prices in Southwest China were stable at RMB 1,680-2,080/tonne.

Market Updates:

July 30: In the Guangzhou, Guangdong market, the reference receiving price for urea was RMB 1,860-1,870/tonne, unchanged from the previous working day.

July 30: In the Nanning, Guangxi market, the reference receiving price for urea was RMB 1,790-1,810/tonne, down from the previous working day.

July 30: In the Shijiazhuang, Hebei market, the reference receiving price for urea was RMB 1,770-1,800/tonne, down RMB 10/tonne from the previous working day.

July 30: In the Wen’an, Hebei market, the reference receiving price for urea was RMB 1,750-1,790/tonne, down RMB 10/tonne from the previous working day.

July 30: In the Shangqiu market, mainstream reference prices for small and medium granules were RMB 1,750-1,760/tonne, while large granules were around RMB 1,820-1,830/tonne.

July 30: In the Jingmen market, mainstream reference prices for small and medium granules were RMB 1,740-1,750/tonne, station self-pickup was temporarily referenced at around RMB 1,700-1,710/tonne, and mainstream station self-pickup prices for large granules were RMB 1,800-1,810/tonne.

July 30: In the Tieling, Liaoning market, ex-warehouse/truck pickup prices were referenced at RMB 1,840-1,860/tonne, down from the previous working day.

July 30: In the Heze, Shandong market, the reference receiving price for urea was around RMB 1,740/tonne, basically unchanged from the previous working day.

July 30: In the Linyi, Shandong market, the reference receiving price for urea was RMB 1,750/tonne, basically unchanged from the previous working day.

July 30: In the Xianyang market, mainstream prices were referenced at RMB 1,840-1,860/tonne, unchanged from the previous working day.