Urea Daily Review: Market Trends Towards Stability, Prices Weakly Adjust

Domestic Urea Price Index:

According to Feiduoduo data calculations, on February 1st, the urea small granule price index was 2253.64, a decrease of 6.82 from the previous day, a month-on-month decrease of 0.30%, and a year-on-year decrease of 20.10%.

Urea Futures Market:

Today, the urea UR405 contract opened in 2083, with a high of 2117, a low of 2065, a settlement price of 2085, and a closing price of 2108. The closing price increased by 18 compared to the previous trading day's settlement price, a month-on-month increase of 0.86%, with the day's fluctuation range between 2065-2117; the Shandong region's basis for the 05 contract is 72; the 05 contract decreased by 5996 hands today, with current holdings at 169,000 hands.

Spot Market Analysis:

Today, the domestic urea market prices adjusted downwards, affected by transportation limitations, leading to a decrease in market transaction activity compared to earlier periods, with most enterprises maintaining stable quotations.

Specifically, prices in the Northeast region remained stable at 2190-2270 yuan/ton. Prices in the North China region decreased to 2020-2280 yuan/ton. Prices in the East China region decreased to 2170-2250 yuan/ton. Prices in the South China region decreased to 2350-2400 yuan/ton. In the Central China region, small and medium granule prices decreased to 2170-2380 yuan/ton, while large granule prices decreased to 2240-2320 yuan/ton. Prices in the Northwest region remained stable at 2210-2220 yuan/ton. Prices in the Southwest region remained stable at 2230-2600 yuan/ton.

Market Forecast:

From the factory perspective, manufacturers have completed pre-holiday orders and are moving into the final stages, focusing on maintaining prices with minor adjustments. Market-wise, snowy weather impacts logistics, limiting factory shipments, leading to a weaker transaction atmosphere compared to earlier periods, and insufficient momentum for further price increases, potentially leading to a softening and exploration of lower market prices. On the supply side, gas-based enterprises' maintenance facilities are gradually resuming operation, with daily production slowly increasing, leading to a more comfortable supply situation, but recent industry shipments have accelerated, leading to a decrease in current enterprise inventories compared to last week. On the demand side, as the Spring Festival approaches, rigid demand continues to weaken, downstream enthusiasm for chasing higher prices decreases, panel factories gradually take holidays and exit the market; compound fertilizer enterprises' operation rates continue to decline; agricultural demand follow-up is limited, with the overall demand side operating weakly.

Overall, the current urea market sees enterprises with sufficient orders and a supportive downward trend in inventories. However, affected by transportation limitations, it is difficult for prices to continue upward, and the urea market is expected to operate in adjustment in the short term, with prices remaining mostly stable with minor adjustments.