Urea Daily Review: Prices Continue to Rise, Market Transactions Slow Down

Domestic Urea Price Index:

According to the calculations by Feidoodoo Data, on November 7th, the price index for small particle urea was 2619.68, an increase of 28.18 from the previous day, up 1.09% month-on-month, and 2.59% year-on-year.

Urea Futures Market:

Today, the opening price for the urea UR2401 contract was 2423, with the highest price at 2485, the lowest price at 2406, the settlement price at 2448, and the closing price at 2429. The closing price was up by 31 compared to the settlement price of the previous trading day, up 1.29% month-on-month, with a daily fluctuation range of 2406-2485; the Shandong area basis for the 01 contract was 151; the 01 contract saw a decrease of 21318 hands in positions today, with a current holding of 367650 hands.

Spot Market Analysis:

Today, domestic urea prices continued to rise, with no sign of a slowdown in the increase. Currently, with pending shipments supporting the market, companies are less willing to make concessions, and prices are mostly adjusted upwards.

Specifically, prices in the Northeast region rose to 2590-2680 yuan/ton. Prices in North China rose to 2430-2680 yuan/ton. Prices in the Northwest region rose to 2590-2600 yuan/ton. Prices in the Southwest region remained stable at 2550-2800 yuan/ton. Prices in East China rose to 2560-2610 yuan/ton. In Central China, the price for small and medium particles rose to 2560-2730 yuan/ton, and for large particles, the price rose to 2570-2730 yuan/ton. Prices in South China rose to 2680-2750 yuan/ton.

Market Forecast:

On the supply side, currently, there is an increase in factory equipment maintenance failures, and daily production has declined, with enterprise inventory continuing to operate at low levels. Additionally, the environmental production restriction policy in Jincheng, Shanxi, and the natural gas restrictions starting this month are two strong influencing factors on the supply side, significantly impacting the current supply volume. On the manufacturer's side, most manufacturers have no willingness to make concessions under the support of pre-received orders from the earlier period, and quotations remain firm, with most maintaining stability while exploring slight increases. In the market, with the recent rise in futures prices, the market atmosphere has significantly improved, and favorable conditions have simultaneously affected the spot market, with an active atmosphere for inquiries. On the demand side, downstream traders are actively following up on purchases, and as storage enterprises enter the inspection period this month, there is still a gap in reserve sources, forcing them to enter the market for procurement, and the market's rigid demand remains; industrial demand for compound fertilizers continues to maintain a low start-up rate, but as compound fertilizer enterprises in the Northeast market gradually start operations, it is expected that the start-up rate of the compound fertilizer industry will gradually increase, leading to a rise in demand for urea.

In summary, the current market price is temporarily high, transactions have slowed down, and there is a slight standoff in factory trading. However, with pending shipments supporting the market, the sentiment is bullish, and it is expected that there is still room for urea market prices to rise in the short term.