Urea Daily Review: Short-Term Price Support Due to Reduced Supply and Pending Orders

Domestic Urea Price Index:

According to Feidoodoo data calculations, on May 7, the price index for small granular urea was 2299.23, an increase of 21.36 from the previous day, a 0.94% rise compared to the previous day, and a 5.28% decrease year-on-year.

Urea Futures Market:

Today, the urea UR409 contract opened at 2147, with a highest price of 2189, a lowest price of 2122, a settlement price of 2157, and a closing price of 2126. The closing price increased by 17 compared to the previous trading day's settlement price, a 0.81% rise. The day's price fluctuation range was between 2122 and 2189. The basis in Shandong for the 09 contract was 174. The 09 contract saw a reduction of 1646 open positions, with a total of 238,465 open positions currently.

Spot Market Analysis:

Today, the domestic urea market prices continued to rise, supported by pending orders post-holiday, with a positive market sentiment. Some factory prices continued to be adjusted upwards.

Specifically, prices in the Northeast region remained stable at 2160-2230 yuan/ton. In the East China region, prices rose to 2280-2340 yuan/ton. In the Central China region, small granular prices increased to 2290-2420 yuan/ton, and large granular prices increased to 2260-2340 yuan/ton. In the North China region, prices rose to 2160-2290 yuan/ton. In the South China region, prices rose to 2330-2480 yuan/ton. In the Northwest region, prices rose to 2250-2260 yuan/ton. In the Southwest region, prices rose to 2250-2550 yuan/ton.

On the factory side, manufacturers continued to execute pending orders with a firm pricing attitude. Additionally, new orders post-holiday have been favorable, leading to continued upward price adjustments. On the market side, sentiment is positive, though high prices have slightly dampened the enthusiasm for further purchases, leading to a cautious market attitude and short-term strong fluctuations. On the supply side, industry operating rates continue to decline, and short-term spot supply remains tight, supporting a positive outlook. On the demand side, agricultural demand is mostly in a wait-and-see mode with minimal on-demand purchases. Industrial compound fertilizer factories focus on post-holiday just-in-time purchases, and with increasing operating rates at compound fertilizer factories, overall replenishment efforts remain strong.

Overall, the current urea market is supported by pending orders with a firm pricing attitude from enterprises. However, resistance to high prices has slightly reduced the momentum for further purchases. It is expected that the short-term urea market price increase will be limited and will likely maintain high-level fluctuations.