Urea Daily Review: Prices Continue to Fall, Downstream Sentiment is Cautious

Domestic Urea Price Index:

According to the data provided by Feidoodoo, on October 11th, the urea granule price index stood at 2440.73, a decrease of 17.59 from the previous day, a month-on-month decline of 0.72%, and a year-on-year drop of 5.75%.

Urea Futures Market:

Today's urea UR2401 contract opened at 2056, with a high of 2078, a low of 2015, a settlement price of 2044, and a closing price of 2037. The closing price fell by 36 compared to the settlement price of the previous trading day, a decrease of 1.74%. The range for the day was 2015-2078, with a difference of 63. The 01 contract increased its position by 6798 hands today, holding a position of 313938 hands as of now.

Spot Market Analysis:

Today, the domestic urea market price continued its downward trend. With dispatches gradually decreasing, companies are frequently reducing their factory quotations in order to secure new orders.

Specifically, the price in the Northeast region dropped to 2420-2490 yuan/ton. The price in North China fell to 2220-2490 yuan/ton. The Northwest region price remained stable at 2410-2420 yuan/ton. The Southwest region's price remained at 2350-2800 yuan/ton. The price in East China decreased to 2310-2380 yuan/ton. The price of small granules in Central China dropped to 2320-2620 yuan/ton, while the price of large granules stabilized at 2470-2510 yuan/ton. The South China region price dropped to 2490-2600 yuan/ton.

Market Forecast:

In terms of supply, the market supply is currently sufficient, and the maintenance devices are still in the process of continuous recovery. From the enterprise perspective, some companies are still fulfilling orders from before the holiday. Dispatches are gradually reducing, and companies' order intake is mediocre, leading to a reduction in factory prices to relieve inventory pressure. On the demand side, market demand remains sluggish, and the downstream continues to adopt a wait-and-see attitude, intensifying the cautious atmosphere. In terms of cost, today's synthetic ammonia prices continue to decline, with the Q5500 port thermal coal turning from high to low, and individual smoke-free block coal mine prices being adjusted downward. Cost support has weakened, but prices still remain at a high level. The price of downstream melamine remains stable.

In summary, there is still some room for the domestic urea market price to fall, so it is expected that the urea market price will continue its downward trend for a short period of time.