Urea Daily Review: Weakened Supply-Demand Support, Enterprises Lower Prices to Attract Orders

Domestic Urea Price Index:

According to Feidoodoo data, on May 27, the domestic small granular urea price index was 2391.68, down by 4.55 from last Friday, a 0.19% decrease, but up 12.38% year-on-year.

Urea Futures Market

Today, the UR409 urea futures contract opened at 2201 yuan/ton, with a high of 2204 yuan/ton and a low of 2175 yuan/ton, settling at 2189 yuan/ton and closing at 2188 yuan/ton. The closing price decreased by 11 yuan, a 0.50% drop from the previous day's settlement. The price range for the day was 2175-2204 yuan/ton. The 09 contract in Shandong had a basis of 182 yuan/ton. Today's open interest decreased by 2321 lots, bringing the total to 239,464 lots.

Today's urea futures prices showed narrow weak fluctuations. The fundamental aspects of the market have not changed significantly, and the previous bullish factors are gradually weakening. However, due to existing pending orders and low inventory pressure for some manufacturers, there is no condition for significant price reductions. Additionally, recent increases in international prices have further supported the domestic price floor. In the short term, urea futures prices are expected to maintain a weak fluctuation trend.

Spot Market Analysis:

Today, domestic urea market prices showed slight decreases. New downstream orders slowed, with some low-price purchases and cautious follow-up sentiment.

Regional Prices:

• Northeast: Stable at 2300-2380 yuan/ton.
• East China: Decreased to 2350-2410 yuan/ton.
• Central China: Small granular prices decreased to 2340-2470 yuan/ton; large granular prices remained stable at 2320-2380 yuan/ton.
• North China: Decreased to 2220-2380 yuan/ton.
• South China: Decreased to 2450-2500 yuan/ton.
• Northwest: Stable at 2390-2400 yuan/ton.
• Southwest: Stable at 2300-2750 yuan/ton.

Enterprise Side:

• New orders have slowed, and manufacturers are actively selling with flexible and slightly lowered prices. Some manufacturers maintain firm prices due to pending orders.

Market Side:

• Previous bullish factors have been exhausted, leading to a slowdown in new transactions. The market shows stable and high prices with cautious sentiment about future trends.

Supply Side:

• Some previously shut down facilities are planning to resume operations, leading to a gradual increase in daily production. However, in some regions, supply remains tight, providing short-term support.

Demand Side:

• Agricultural demand is in a lull, and industrial downstream compound fertilizer factories are concluding summer fertilizer production, reducing raw material procurement needs.

Overall: The urea market shows a significant slowdown in follow-up, with weakened supply-demand support. Short-term prices are supported by pending orders, leading to stable and slightly fluctuating prices with limited changes expected.