Urea Daily Review: Slowdown in New Orders, Firm and Stable Enterprise Quotes

Domestic Urea Price Index:

According to Feidoodoo data, on May 23, the small granular urea price index was 2397.59, a decrease of 3.86 from the previous day, representing a 0.16% day-on-day decline but a 9.65% year-on-year increase.

Urea Futures Market:

Today, the UR409 urea futures contract opened at 2178 yuan/ton, reaching a high of 2194 yuan/ton and a low of 2155 yuan/ton, with a settlement price of 2176 yuan/ton and a closing price of 2175 yuan/ton. The closing price decreased by 35 yuan compared to the previous trading day’s settlement, down by 1.58%. The day's trading range was 2155-2194 yuan/ton. The basis for the 09 contract in the Shandong region was 205 yuan/ton. The 09 contract saw a decrease of 3995 lots in open interest today, totaling 240,688 lots.

Today’s urea futures prices showed weak oscillations, influenced by the broader market environment. The overall commodity market was relatively weak, with macro funds primarily flowing out for profit-taking. For the urea market, the previous price increase was relatively limited, so the downward adjustment space is also small. Currently, urea lacks new driving factors, with existing fundamental support showing signs of marginal weakening. In the short term, the market is expected to maintain weak oscillations.

Spot Market Analysis:

Today, domestic urea market prices were stable to slightly lower, with a slowdown in new orders. Supported by pending orders and low inventory, enterprise quotes remained firm for the short term.

• Northeast: Prices stable at 2300-2380 yuan/ton.
• East China: Prices increased to 2370-2420 yuan/ton.
• Central China: Small and medium granular prices fell to 2340-2470 yuan/ton, while large granular prices remained stable at 2320-2380 yuan/ton.
• North China: Prices decreased to 2240-2380 yuan/ton.
• South China: Prices fell to 2460-2500 yuan/ton.
• Northwest: Prices stable at 2390-2400 yuan/ton.
• Southwest: Prices stable at 2300-2750 yuan/ton.

Factory Side:

Current factory orders are gradually decreasing, with moderate order intake. Pending orders still provide support, leading some enterprises to continue controlling new orders and maintaining firm quotes. Prices remained stable, with slight downward adjustments by a few enterprises today.

Market Side:

New order transactions slowed, and trading enthusiasm cooled compared to previous periods. The market remained at high levels, with narrow oscillations and increased caution among participants. Market sentiment was more conservative, leading to a stalemate in high-price transactions and stronger interest in lower-priced goods.

Supply Side:

Enterprise inventories continued to decrease, with maintenance operations yet to resume. Some facilities experienced unexpected short-term stoppages, leading to slower-than-expected daily production increases. Supply is gradually recovering.

Demand Side:

Agricultural demand is ongoing but at a slower pace. Industrial compound fertilizer factories are cautious in their procurement, reducing their enthusiasm for high-price purchases. Overall demand support weakened, with just-in-time procurement slowing down.

Overall:

The current urea market is supported by pending orders and firm quotes from manufacturers. However, the enthusiasm for high-priced purchases is weakening, and new order transactions are slowing. In the short term, urea prices are expected to remain stable with minor adjustments and limited fluctuation space.