Urea Daily Review: Stable-to-Moderate Decrease in Factory Quotes, Market Exhibits Correction Trend

Domestic Urea Price Index:

According to data from Feidoodoo, the calculated price index for small granular urea on August 22nd was 2522.09, showing a rise of 2.95 compared to the previous day, a slight increase of 0.12% on a month-on-month basis, and a year-on-year increase of 5.92%.

Urea Futures Market:

For the UR2401 urea contract, the opening price was 2149, with a highest price of 2150, a lowest price of 2102, a settlement price of 2120, and a closing price of 2123. The closing price decreased by 12 compared to the previous trading day's settlement price, marking a decrease of 0.56% on a month-on-month basis. The price fluctuated within the range of 2102 to 2150 throughout the day, with a spread of 48. On this day, the 01 contract saw a reduction of 12626 contracts, with the current open interest reaching 331220 contracts.

Spot Market Analysis:

Today, the domestic urea market experienced narrow price fluctuations. Influenced by the recent upward trend due to previous days' positive market sentiment, urea prices continued to rise, reaching a high point. However, a slight correction trend has emerged in the market recently.

In specific terms, prices in the Northeast region remained stable within the range of 2240-2460 CNY/ton. In North China, prices stabilized between 2350-2600 CNY/ton. In Northwest China, prices remained steady at 2590-2600 CNY/ton. The Southwest region saw prices rise to 2400-2800 CNY/ton. Prices in East China increased to 2510-2580 CNY/ton. In Central China, prices for small granular urea remained stable at 2450-2680 CNY/ton, while large granular urea maintained stability at 2480-2550 CNY/ton. The South China region had stable prices ranging from 2600-2680 CNY/ton.

Market Forecast:

On the industry side, the current operating rate remains low, daily production and inventory levels are relatively low, and many manufacturing facilities are undergoing maintenance. As a result, the market supply remains insufficient, contributing to favorable supply-side conditions. On the demand side, the downstream compound fertilizer sector has entered the peak season for autumn fertilizer production, leading to a certain level of demand. However, concerning the influence of the Indian tendering process, as the bidding phase concludes, purchases have temporarily eased, and the potential impact of replenishments by exporters on the market situation remains. Close attention is needed to monitor trends in compound fertilizer procurement.

In summary, the market's positive sentiment from recent developments has faded, and the domestic urea market is gradually weakening in terms of prices. Nevertheless, the balance between supply and demand remains favorable, and it is anticipated that the urea market will experience minor fluctuations in the short term.