Urea Daily Review: Prices Continue to Rise, Downstream Transaction Atmosphere Weakens

Domestic Urea Price Index:

According to data from Feidoodoo on November 1st, the small granule urea price index stood at 2565.59, an increase of 11.50 from the previous day, a rise of 0.45% compared to the previous day, and a year-on-year increase of 1.39%.

Urea Futures Market:

Today, the urea UR2401 contract opened at 2327, reached a high of 2380, a low of 2322, settled at 2345, and closed at 2337. The closing price increased by 4 compared to the last trading day, an increase of 0.17%. The full-day fluctuation range was 2322-2380; the basis difference for the 01 contract in the Shandong region was 193; the 01 contract increased its position by 1885 lots today, with a current open interest of 366466 lots.

Spot Market Analysis:

Today, the domestic urea price remained stable, with the downstream appropriately following up. Enterprises saw positive orders earlier, with support from pending shipments. Furthermore, international positive news boosted confidence, with many enterprises maintaining high prices.

Specifically, prices in the Northeast region increased to 2550-2600 yuan/ton. In the North China region, prices rose to 2400-2600 yuan/ton. Prices in the Northwest region stabilized at 2500-2510 yuan/ton. The Southwest region had prices at 2480-2800 yuan/ton. Prices in the East China region rose to 2520-2570 yuan/ton. In Central China, small granule prices increased to 2500-2660 yuan/ton, and large granule prices rose to 2550-2660 yuan/ton. Prices in the South China region went up to 2630-2660 yuan/ton.

Market Forecast:

In terms of supply, with continuous shipments from factories and ports, enterprise stocks remain low, indicating a tight spot supply. Moreover, starting this month, due to natural gas restrictions, gas-based urea production has begun to decline, reducing future supply. On the manufacturer side, with the support of new orders in the past two days, pending shipments have increased, with manufacturers raising their prices and maintaining a positive mindset. Regarding demand, recent procurements are mostly essential, with agricultural demand focusing on storage, and industrial demand replenishing orders based on needs. From the market's perspective, the continued rise in prices has led to a decrease in overall transaction activity compared to the previous two days. Agricultural demand in the Northeast and Northwest regions is need-based, indicating regionalized market demand.

In summary, the current atmosphere in the main domestic urea production regions is optimistic, with active downstream inquiries. However, due to the continued price increase in recent days, a wait-and-see attitude among traders has emerged, predicting a short-term stalemate and consolidation in the urea market.