Urea Daily Review: Market Atmosphere Cools, Urea Prices Decline

Domestic Urea Price Index:

According to Feidoodoo data estimation, on February 26th, the urea small particle price index was 2311.05, a decrease of 12.41 from last Friday, down 0.53% week-on-week, and a 17.17% decrease year-on-year.

Urea Futures Market:

Today's urea UR405 contract opening price was 2145, with a high of 2150, a low of 2111, a settlement price of 2132, and a closing price of 2138. The closing price decreased by 34 compared to the previous trading day's settlement price, down 1.57%, with the day's fluctuation range between 2111-2150; the 05 contract's basis in the Shandong area was 92; the 05 contract decreased by 8574 lots in open interest today, with current open interest at 180,000 lots.

Spot Market Analysis:

Today, the domestic urea market prices were adjusted downwards, with factory quotations showing a steady decline, and the market saw a slight increase in transactions after the price adjustments.

Specifically, prices in the Northeast region fell to 2290-2360 CNY/ton. In the North China region, prices fell to 2120-2380 CNY/ton. In the East China region, prices fell to 2220-2280 CNY/ton. In the South China region, prices remained stable at 2380-2420 CNY/ton. In the Central China region, prices for small and medium particles fell to 2210-2380 CNY/ton, while large particle prices fell to 2300-2400 CNY/ton. In the Northwest region, prices fell to 2260-2270 CNY/ton. In the Southwest region, prices remained stable at 2300-2600 CNY/ton.

Market Forecast:

From the perspective of factories, after the adjustment of factory prices, the situation of receiving orders was average. The current quotations have slightly eased and adjusted downwards, with a slight warming in receiving orders, and enterprise inventory continues to remain high. With the recovery of logistics, enterprises' shipments have increased. From the market perspective, the market trading atmosphere has cooled down, with few new deals, and the current market prices have slightly retreated, operating under a weak and fluctuating consolidation, with transactions maintaining a lukewarm state. On the supply side, starting this week, the incremental maintenance of industry devices and the expectation of a decline in operations have led to a short-term downward adjustment in supply. On the demand side, the follow-up on the demand end has weakened, providing limited support to prices, with industrial demand continuing to increase, and the recovery of downstream factories being slow, gradually releasing the positive demand for urea.

In summary, the current urea market atmosphere has cooled compared to earlier periods, and demand is still in the recovery process. It is expected that urea market prices will continue to fluctuate narrowly in the short term.