Urea Daily Review: Market Supply Continues to Shrink, Corporate Quotes Keep Rising

June 12, 2024, 9:21 AM

Feidoodoo

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Guide

Highlights at a glance

The domestic urea market remained firm on May 11, with the small particle price index at 2,326.18, up 0.27% month-on-month but down 2.16% year-on-year. Price increases slowed as downstream buyers showed caution toward high prices, despite tight supply supporting the market. Regional prices rose in Northeast, East, Central, and North China, while stabilizing in South, Northwest, and Southwest regions. Factory quotes stayed strong due to limited spot supply and ongoing maintenance shutdowns reducing output. Although industrial demand remains steady during the summer high-nitrogen fertilizer production season, purchasing sentiment has weakened amid elevated prices. New orders are declining, leading to a market stalemate with cautious business outlooks. While supply constraints provide support, rising prices face resistance from tepid downstream demand. In the short term, urea prices are expected to stabilize with minor fluctuations under upward pressure.

Domestic Urea Price Index:

According to data calculated by Feidoodoo, on May 11th, the urea small particle price index was 2326.18, an increase of 6.36 from the previous day, up by 0.27% month-on-month, and down 2.16% year-on-year.

Spot Market Analysis:

Today, the uptrend in domestic urea market prices has slowed, downstream fear of high prices has gradually become apparent, market supply continues to decline, forming a favorable support, and today's quotes continue to rise.

Specifically, prices in the Northeast region rose to 2210-2270 yuan/ton. Prices in the East China region rose to 2300-2360 yuan/ton. Prices for small particles in the Central China region rose to 2310-2420 yuan/ton, while prices for large particles stabilized at 2260-2310 yuan/ton. Prices in the North China region rose to 2180-2330 yuan/ton. Prices stabilized at 2370-2480 yuan/ton in the South China region and at 2320-2330 yuan/ton in the Northwest region. Prices stabilized at 2260-2650 yuan/ton in the Southwest region.

Factory Aspect:

In recent days, although the volume of new orders at factories has decreased, due to the tight spot supply in the mainstream regions, corporate sales pressure has not become prominent, and factory quotes remain firm. Some factories are holding back from selling and prioritizing maintaining prices. In the market, the transaction of new orders has slowed down, trading sentiment has weakened, and the market is temporarily in a stalemate. Business sentiment is cautious, with a limited bearish outlook on the future market. On the supply side, enterprise maintenance plans are approaching this month, spot supply continues to be tight, industry start-ups are declining, and daily production is decreasing. On the demand side, industrial compound fertilizer factories are still in the high-nitrogen fertilizer production period in the summer, downstream rigid demand continues, providing strong support for urea consumption, but currently, the market's high price affects the downstream purchasing mentality, which is more cautious and slower.

Overall View:

Currently, the urea market conditions continue to operate firmly. Downstream purchasing demand follows up limitedly, and it is difficult for prices to continue rising. It is expected that in the short term, the urea market prices will continue to face upward pressure, with stability and slight range adjustments.

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