Urea Daily Review: Market Atmosphere Stalemate, Price Increase Slows

Domestic Urea Price Index:

According to Feidoodoo data calculations, on May 9, the price index for small granular urea was 2318.00, an increase of 2.73 from the previous day, a 0.12% rise compared to the previous day, and a 3.54% decrease year-on-year.

Urea Futures Market:

Today, the urea UR409 contract opened at 2130, with a highest price of 2144, a lowest price of 2105, a settlement price of 2122, and a closing price of 2118. The closing price increased by 6 compared to the previous trading day's settlement price, a 0.28% rise. The day's price fluctuation range was between 2105 and 2144. The basis in Shandong for the 09 contract was 192. The 09 contract saw an increase of 1861 open positions, with a total of 242,484 open positions currently.

Today, urea futures prices mainly experienced narrow fluctuations. The current urea market is supported by expectations of reduced supply and strong demand, providing strong support for prices. However, high prices are also constrained by policy controls and downstream resistance. Further upward movement may require exacerbation of supply-demand conflicts. In the short term, aftermarket sentiment cools, there may be some negative feedback to the spot market. Until then, urea prices are expected to maintain narrow fluctuations.

Spot Market Analysis:

Today, domestic urea market prices saw a slight increase. Enterprise quotations mostly remained stable, but sentiment affected price pressure for further increases.

Specifically, prices in the Northeast region remained stable at 2190-2250 yuan/ton. In the East China region, prices remained stable at 2290-2340 yuan/ton. In the Central China region, small granular prices remained stable at 2300-2420 yuan/ton, while large granular prices remained stable at 2260-2310 yuan/ton. In the North China region, prices remained stable at 2170-2320 yuan/ton. In the South China region, prices rose to 2350-2480 yuan/ton. In the Northwest region, prices rose to 2320-2330 yuan/ton. In the Southwest region, prices remained stable at 2260-2650 yuan/ton.

On the factory side, new orders slowed down today, with manufacturers continuing to ship previously received orders without shipping pressure. Quotations remained stable, with strong price support intentions. On the market side, cautious sentiment led to a slower pace of follow-up purchases, and the overall atmosphere was less active compared to before. The market remains stable with a wait-and-see approach. On the supply side, maintenance of production facilities has started, leading to a downward trend in daily production. Current enterprise inventories remain low, and some companies have maintenance plans, resulting in tight market supply. On the demand side, the domestic agricultural demand season continues, with steady progress in just-in-time fertilizer stocking. Downstream factories continue to follow up on raw material procurement, currently in a concentrated purchasing phase with strong demand for compound fertilizers.

Overall, the current urea market is in a high-level stalemate, with limited upward price movement and potential for price adjustments. However, the impact of ongoing maintenance may limit the extent of price reductions. In the short term, urea market prices are expected to remain stable with limited downward adjustments.