Urea Daily Review: Shortened Agricultural Fertilization Period, Active Market Transactions

Domestic Urea Price Index:

According to Feidoodoo data, the urea small granule price index on October 31 was 2554.09, up 33.50 from yesterday, an increase of 1.33% month-on-month, and an increase of 0.98% year-on-year.

Urea Futures Market:

Today's urea UR2401 contract opened at 2325, with a high of 2355, a low of 2311, a settlement price of 2333, and a closing price of 2335. The closing price was up 2 compared to the last trading day, an increase of 0.09%, with a daily fluctuation range of 2311-2355. The 01 contract's Shandong area base difference is 205; the 01 contract reduced its position by 6569 lots today, with a current position of 364581 lots.

Spot Market Analysis:

Today, the domestic urea market continues to run strong, with prices continuing to rise. In the short term, factory sales are smooth, downstream procurement continues to follow up, and international high prices support the upward adjustment of enterprise quotes.

Specifically, the price in the Northeast region has risen to 2500-2550 yuan/ton. The price in North China has risen to 2400-2570 yuan/ton. The price in the Northwest region has risen to 2500-2510 yuan/ton. The price in the Southwest region has risen to 2480-2800 yuan/ton. The price in the East China region has risen to 2520-2570 yuan/ton. The price of small granules in Central China has risen to 2500-2640 yuan/ton, and large granules have risen to 2550-2640 yuan/ton. The price in the South China region has risen to 2600-2660 yuan/ton.

Market Forecast:

On the supply side, current daily production continues to run strong, and market supply is expected to continue. In the future, there may be a decline in supply, and daily production will be lower than the current level. On the enterprise side, the market atmosphere is improving, and new orders are increasing. Due to a small amount of enterprise inventory, the current market spot supply is tight, and most enterprises are adjusting their factory quotes upwards, with prices mostly firm and probing higher. On the demand side, domestic agricultural fertilization has increased this week, and due to the shortened reserve period, market procurement enthusiasm has improved; industrial demand continues to maintain a relatively stable state, but with the start of the high-nitrogen compound fertilizer production season in November, it is expected that downstream compound fertilizer demand for urea will increase. Internationally, after the natural gas supply in the Egyptian market tightened, overseas market quotes began to rise. The current Egyptian November paper quote has returned to 400 US dollars/ton.

Overall, the current urea market is affected by increased domestic fertilization, good enterprise orders, and boosted market confidence. Under the positive support of smooth factory production and sales, it is expected that the urea market price will continue to rise in the short term.