Urea Daily Review: Urea production reduced in Egypt, domestic urea prices rise

Domestic Urea Price Index:

According to Feidodo data, the small granule urea price index on October 30 is 2520.59, up 28.64 from last Friday, a week-on-week increase of 1.15%, and a year-on-year decrease of 0.34%.

Urea Futures Market:

Today's urea UR2401 contract opening price: 2296, highest price: 2375, lowest price: 2278, settlement price: 2333, closing price: 2342, up 122 compared to the last trading day's settlement price, up 5.50%. The trading range for the day was 2278-2375; the current open interest for the 01 contract is 371,150.

Spot Market Analysis:

Today, the domestic urea market price rose again, with the main regional prices continuously increasing, the adjustments ranging from 10-100 RMB/ton. The market atmosphere is favorable, and downstream traders are following suit. Positive international news has also led to higher factory prices.

Specifically, the price in the Northeast region is stable at 2460-2550 RMB/ton. North China prices have risen to 2390-2500 RMB/ton. Northwest prices have fallen to 2420-2430 RMB/ton. Southwest prices are stable at 2420-2800 RMB/ton. East China prices have risen to 2480-2550 RMB/ton. Central China small granule prices have risen to 2500-2620 RMB/ton, while large granules have fallen to 2530-2610 RMB/ton. South China prices have risen to 2590-2630 RMB/ton.

Market Forecast:

On the supply side, daily production remains robust, and the operating rate remains high. Shandong Runyin has plans to stop production this week, and some other companies plan to shut down next month, resulting in a slight drop in output. As for the factories, the order pressure has eased slightly. Most have a stronger sentiment and are raising their factory prices due to the supportive international news. On the demand side, agricultural needs are still in winter storage mode and are cautious due to its long cycle. On the industrial demand front, some compound fertilizer factories in Northeast China have started production, but the overall opening rate remains low. Prices of raw materials are high, and many factories are still in a wait-and-see mode. Overseas, Egypt announced a reduction in urea production due to natural gas shortages on the 29th, which is expected to raise international prices. The increasing price difference between domestic and international markets will raise domestic urea valuations.

In summary, the urea market is primarily waiting for positive export news, and the participation volume in the "India tender" will be the key factor affecting domestic urea prices. Given the current export news, there is still room for a short-term rise in the urea market.