Urea Daily Review: Market Remains Firm Despite Negative News

Domestic Urea Price Index:

According to Feidoodoo data, on December 7th, the urea small particle price index was 2530.14, up 4.55 from the previous day, an increase of 0.18% compared to the previous day, and a decrease of 9.12% year-on-year.

Urea Futures Market:

Today, the urea UR2401 contract opened at 2432, with the highest price at 2447, the lowest at 2362, the settlement price at 2409, and the closing price at 2377. The closing price fell 40 compared to the previous trading day's settlement price, down 1.65%, with a daily fluctuation range of 2362-2447; the Shandong region basis for the 01 contract was 103; the 01 contract decreased by 26813 positions today, with current holdings at 113427 positions.

Spot Market Analysis:

Today, domestic urea prices slightly increased, with the overall increase by companies being modest. Most companies held steady prices. Currently, influenced by news, the market purchasing appears somewhat stagnant.

Specifically, prices in the Northeast region remained stable at 2500-2530 RMB/ton. In the North China region, prices rose to 2350-2540 RMB/ton. Prices in the Northwest region were stable at 2500-2510 RMB/ton. Southwest region prices remained stable at 2480-2800 RMB/ton. Prices in the East China region increased to 2460-2500 RMB/ton. In the Central China region, small particle prices increased to 2470-2650 RMB/ton, while large particle prices remained stable at 2580-2660 RMB/ton. Prices in the South China region rose to 2620-2690 RMB/ton.

Market Forecast:

From the factory side, factory quotes mostly remained stable, mainly fulfilling pre-received orders, with the overall market pre-reception maintaining about a week. A few enterprises slightly increased prices due to downstream restocking, but overall, prices are expected to stabilize with minor adjustments. In the market, influenced by negative news, inquiries decreased compared to the previous two days, turning the overall atmosphere to cautious observation. In terms of supply, plants are gradually halting for maintenance this week, including Shanxi Lanhua and Yangmei Fengxi's coal-head plants, reducing supply, with more plant shutdowns expected later, requiring continuous monitoring. In terms of demand, agricultural needs are mostly winter storage with on-demand replenishment, maintaining a cautious attitude; in industrial demand, the downstream compound fertilizer market is flat, and under cost pressure, the enthusiasm for picking up goods is not high, with a majority still observing.

Overall, the urea market has cooled in terms of new orders, with downstream purchasing sentiment influenced by news, leading to bland transactions. It is expected that urea market prices will stabilize and consolidate in the short term.