Urea Daily Review: Market Fears of Heights Manifest, Urea Prices Slightly Retract

Domestic Urea Price Index:

According to the data calculated by Feidoodoo, on November 9, the price index for small granule urea was 2615.14, down 9.55 from yesterday, a 0.36% decrease from the day before and a 0.62% increase year-over-year.

Urea Futures Market:

Today's urea UR2401 contract opened at 2376, with a high of 2425, a low of 2350, a settlement price of 2388, and a closing price of 2403. The closing price rose by 12 compared to the previous trading day's settlement, a 0.50% increase, with a daily fluctuation range of 2350-2425. The Shandong area basis for the 01 contract is 147; the 01 contract reduced positions by 13470 hands today, with current holdings at 341136 hands.

Spot Market Analysis:

Today, the domestic urea prices mostly adjusted slightly downwards. The market trading atmosphere was weak, and new orders were not satisfactory. Manufacturers were forced to lower their factory prices, and traders sold at reduced prices.

Specifically, prices in the Northeast region remained stable at 2590-2680 yuan/ton. Prices in the North China region fell to 2410-2680 yuan/ton. Prices in the Northwest region remained stable at 2610-2620 yuan/ton. Prices in the Southwest region remained stable at 2550-2800 yuan/ton. Prices in the East China region fell to 2540-2620 yuan/ton. Prices for small granules in the Central China region remained stable at 2560-2730 yuan/ton, and large granules remained at 2680-2730 yuan/ton. Prices in the South China region fell to 2680-2760 yuan/ton.

Market Forecast:

On the supply side, daily production continues at high levels, with a slight increase in corporate inventory from low levels. There are ongoing factors such as reduced supply and slow stock accumulation, maintaining a tight supply situation. As for manufacturers, current supplies are mainly directed towards collection ports and downstream compound fertilizer factory raw material purchases. Some urea factories in major producing areas have received good orders, accumulating a certain number of pending orders, further strengthening market confidence. Some manufacturers have few new orders and are forced to lower prices to attract orders under reduced pending orders. In the market, there is currently a low acceptance of high-priced goods, and there is a trend of pausing high-priced raw material purchases today. However, with manufacturers' pending orders lasting about a week and the strong support of low enterprise inventory, the market maintains a state of bargaining between manufacturers. On the demand side, agricultural demand is at a standstill, and there is a slight uptrend in industrial rigid demand, with the demand side still relatively weak in supporting the market.

In summary, influenced by pending orders and low inventory, factories have a strong price-holding mentality, but the downstream demand for high-priced fertilizers has paused, and the mentality is to watch and wait. The market has few new orders, and it is expected that the urea market price will adjust with slight fluctuations in the short term.