Urea Daily Review, June 18: Sentiment Eases, Fundamentals Weigh on the Market

Domestic Urea Price Index

According to FDD data estimates, on June 18, China’s small-granule urea price index stood at 1,864.09, up 8.64 from the previous working day, representing a day-on-day increase of 0.47% and a year-on-year decrease of 0.54%.

Urea Futures Market

Today, the UR2609 urea futures contract opened at 1,831, reached a high of 1,835 and a low of 1,798, with a settlement price of 1,814 and a closing price of 1,813. The closing price was down 20 from the previous trading day’s settlement price, a decrease of 1.09%. The Shandong basis for the September contract stood at +37. Open interest decreased by 30,947 lots today, with total open interest at 255,292 lots.

The urea futures market pulled back today. The bullish sentiment triggered by yesterday’s upward adjustment of the guidance price did not continue to build. The market remains cautious about actual transaction prices during the off-season, and the policy adjustment is currently viewed more as a stabilizing factor.

Meanwhile, the continued easing of international geopolitical tensions led to a decline in global prices, with energy costs also moving lower. In addition, after the Federal Reserve’s interest rate meeting, a more hawkish shift in rate expectations added macro pressure. Together, macro sentiment and real fundamental contradictions weighed on the futures market.

However, the spot market performed relatively well. As the wheat harvest comes to an end, corn fertilization demand in North China and rice topdressing demand in southern regions have gradually started. Agricultural demand has shown a phased recovery. Most producers in major regions reported improved new order intake, and some ex-works prices continued to edge higher. The market is watching whether follow-up transactions can sustain and form a short-term resonance with the policy floor.

Overall, policy-driven sentiment has supported short-term expectation repair, while real demand recovery has provided phased support. However, the core bearish logic of supply-demand imbalance has not changed, and high supply pressure remains. Upside room is still strongly capped. Going forward, attention should be paid to whether summer agricultural demand can sustain market optimism.

Spot Market Analysis

China’s domestic urea spot market remained firm today, with prices in some regions continuing to rise slightly. Over the past two days, new order activity at some producers improved, helping the market stabilize after previous declines. Supported by higher coal prices and the adjustment of industry guidance prices, producers generally raised quotations, and market sentiment improved temporarily.

However, the loose fundamental structure has not changed materially. On the supply side, daily output remains high, producer inventories continued to build this week, and factories still face shipment pressure. On the demand side, agricultural demand has seen only sporadic release and has not yet entered a large-scale procurement phase. Industrial compound fertilizer producers are maintaining only limited need-based purchasing, providing limited support for raw material prices. On the export side, actual transaction orders remain scarce, while domestic demand remains weak, leaving the market short of sustained upward momentum.

Overall, spot prices may remain firm in the short term under sentiment and cost support, but upside room is limited. Further attention should be paid to the progress of summer fertilizer procurement and the actual implementation of export policy.

At present, China’s domestic urea spot market is still operating within a range-bound pattern. Supply pressure remains relatively high, as industry capacity utilization and daily output stay elevated, while the impact of partial plant maintenance remains limited. On the demand side, summer fertilizer demand has not yet recovered on a large scale, with only localized topdressing demand emerging. Downstream compound fertilizer, panel, melamine and other industrial sectors remain weak, and procurement is mainly need-based.

In terms of inventories, weaker demand has slowed shipments and led to a rapid buildup in producer inventories. On the policy side, a moderate release of export quotas is only a structural adjustment during the off-season and is unlikely to change the domestic oversupply situation. Going forward, market participants should watch export shipment progress, summer topdressing demand and fluctuations in coal costs.

Regional Prices

In Northeast China, prices remained stable at RMB 1,870-1,920/mt.

In East China, prices rose to RMB 1,830-1,860/mt.

In Central China, prices remained stable at RMB 1,790-1,920/mt.

In North China, prices rose to RMB 1,700-1,910/mt.

In South China, prices remained stable at RMB 1,900-1,940/mt.

In Northwest China, prices remained stable at RMB 1,720-1,740/mt.

In Southwest China, prices declined to RMB 1,770-2,100/mt.

Market Updates

June 18: The urea receiving reference price in Guangzhou, Guangdong was RMB 1,930-1,940/mt, unchanged from the previous working day.

June 18: The urea receiving reference price in Nanning, Guangxi was RMB 1,900-1,910/mt, unchanged from the previous working day.

June 18: The urea receiving reference price in Shijiazhuang, Hebei was RMB 1,840-1,850/mt, up RMB 30/mt from the previous working day.

June 18: The urea receiving reference price in Wen’an, Hebei was RMB 1,830-1,840/mt, up RMB 40/mt from the previous working day.

June 18: In Shangqiu, mainstream small- and medium-granule urea prices were RMB 1,840-1,850/mt, while large-granule urea was around RMB 1,870-1,880/mt, up RMB 20/mt from the previous working day.

June 18: In Jingmen, mainstream small- and medium-granule urea prices were RMB 1,790-1,800/mt. Platform self-pickup prices were temporarily around RMB 1,730-1,770/mt, while mainstream large-granule urea platform self-pickup prices were RMB 1,860-1,870/mt.

June 18: In Tieling, Liaoning, warehouse-out/truck pickup prices were RMB 1,880-1,920/mt, unchanged from the previous working day.

June 18: The urea receiving reference price in Heze, Shandong was around RMB 1,830-1,840/mt, up RMB 10/mt from the previous working day.

June 18: The urea receiving reference price in Linyi, Shandong was RMB 1,840-1,850/mt, up RMB 30/mt from the previous working day.

June 18: Mainstream prices in Xianyang were RMB 1,720-1,740/mt, unchanged from the previous working day.