Urea Daily Review: Spring Festival Pre-received Orders Nearing Completion, Limited Market Activity

Domestic Urea Price Index:

According to data from Feidoodoo, on February 5th, the price index for small urea granules was 2256.82, marking an increase of 4.09 compared to the previous day. This represents a 0.18% increase on a day-to-day basis but a 19.93% decrease year-on-year.

Urea Futures Market:

On the same day, the UR405 urea futures contract opened at 2114, reached a high of 2149, hit a low of 2114, settled at 2133, and closed at 2137. Compared to the previous trading day's settlement price, it increased by 34, indicating a 1.62% day-to-day rise. The trading range for the day was 2114-2149. The 05 contract in Shandong had a basis difference of 43. The 05 contracts saw an increase of 1546 positions today, with a total open interest of 173,900 contracts as of now.

Spot Market Analysis:

Today, the domestic urea market saw a slight price increase. Prices in various production regions remained relatively stable, with some manufacturers making minor price adjustments.

Specifically, in the Northeastern region, prices remained stable at 2190-2270 yuan/ton. In the North, prices rose to 2070-2280 yuan/ton. In the East, prices fell to 2170-2240 yuan/ton. In the South, prices remained stable at 2350-2400 yuan/ton. In the Central region, prices for small urea granules increased to 2190-2380 yuan/ton, while prices for large granules remained stable at 2240-2320 yuan/ton. Prices in the Northwest remained stable at 2210-2220 yuan/ton, and in the Southwest, prices remained stable at 2230-2600 yuan/ton.

Future Outlook:

On the factory side, factory quotations remained stable with minor adjustments. Currently, the phase of finalizing pre-received orders is ongoing, and factories are making limited price adjustments. The factories are primarily focusing on delivering pre-received orders, and there is not a strong willingness for overall price adjustments.

In terms of the market, industry players are gradually entering holiday mode, and the market is maintaining overall stability, gradually transitioning into a state of having prices but limited transactions. Regarding supply, there has been minimal fluctuation in daily production, with the industry's operating rate remaining around 82%. On the demand side, downstream players are gradually leaving the market, leading to subdued market demand, and limited trading activity ahead of the holiday.

In summary, as the year-end approaches, downstream players are gradually going on holiday, resulting in limited market activity. It is expected that the urea market will mainly maintain price stability in the short term.