Urea Weekly: Export News Guides the Market, Business Atmosphere Follows

Market Overview

According to the Feidoodoo Price Index, urea market prices fluctuated this week. The market saw repeated fluctuations driven by export news, leading to fluctuating enterprise quotations.

Feidoodoo data indicates that by this Friday, the domestic small-particle urea price index averaged 2232.99, up by 86.95, or a 4.05% increase week-over-week.

At the beginning of the week, with the relaxation of export policies, business pessimism began to recover. Market purchasing enthusiasm increased, and with more enterprise equipment failures requiring maintenance, daily production maintained high levels but showed a downward trend. This somewhat positive development spurred demand in agricultural rice areas to stock up appropriately, with many taking advantage of lower prices to follow up, improving market conditions and leading to significant upward adjustments in enterprise quotations.

Mid-week, stimulated by export news, market transaction activity increased. However, as domestic prices continued to rise and international prices fell, the export situation did not create a favorable scenario. Domestic exports remained weak, causing businesses to slow their pace in chasing higher prices, and the market follow-up for new orders was slightly weak, leading to a weaker transaction atmosphere and most enterprises holding their quotations steady, with some making minor downward adjustments.

Towards the end of the week, market sentiment was once again boosted by export news, creating a bullish atmosphere among traders and pushing market conditions to rebound from declines. With most enterprises having sufficient pre-received orders and an increase in pending shipments, weekly inventories decreased and operated at low levels. Multiple favorable factors overlapping led to continued upward adjustments in industry quotations and a better price trend.

Delivery Area Quotations

Specifically, prices in the Northeast region rose to 2200-2260 yuan per ton. In East China, prices increased to 2230-2260 yuan per ton. In Central China, small-particle prices rose to 2230-2350 yuan per ton, and large-particle prices to 2230-2250 yuan per ton. In North China, prices rose to 2100-2250 yuan per ton. In South China, prices increased to 2320-2390 yuan per ton. In Northwest China, prices rose to 2200-2210 yuan per ton. In Southwest China, prices increased to 2200-2500 yuan per ton.

Futures Warehouse Receipt Distribution

As of this Thursday, Zhengzhou Commodity Exchange urea futures stood at 2579 sheets, a decrease of 159 sheets week-over-week.

Industry Chain Dynamics

Production Situation

This week, domestic urea production was approximately 1.264 million tons, a decrease of 2.12, or a 1.65% drop week-over-week, but a 4.56% increase year-over-year; daily production was 180,600 tons. Throughout the week, the industry continued to decrease as more facilities entered maintenance, and daily production showed a declining trend. Some enterprises have maintenance plans by the end of this month, but some previously shut-down facilities are expected to resume production by month-end, anticipating a steady supply with fluctuating adjustments next week.

Market Inventory

Enterprise: This week, enterprise inventory was about 540,500 tons, down by 93,800 tons, or a 14.79% decrease week-over-week; compared to the same period last year, it decreased by 326,800, a 37.68% drop.

Port: Port inventory was 202,000 tons, up by 7,000 tons, or a 3.59% increase week-over-week; compared to the same period last year, it increased by 30,000 tons, a 17.44% increase.

Composite Fertilizer Industry

This week, the domestic composite fertilizer market prices continued to adjust downwards, with a low price transaction volume increase. By this Friday, the domestic 45%S price index was 2826.67; the 45%CL price index was 2409.09.

Enterprises: This week, enterprises promoted shipments, with some improving goods outflow. The current focus was on moving goods, with slight adjustments in quotations and minor changes, reducing market price differences.

Melamine Industry

This week, the melamine market adjusted steadily, with prices slightly exploring higher levels. On the factory side, some enterprises received orders at acceptable levels, mostly at low prices, with pending orders being the main focus for shipment, supported by high raw material prices, leading to firm prices with limited fluctuations.

International Market Quotes

In terms of the international market, bulk small-particle Chinese FOB prices were 297-310 USD per ton, adjusted up by 2-11 USD per ton; Baltic FOB prices were 225-270 USD per ton, adjusted down by 15-20 USD per ton.

Future Outlook

Supply: This week, enterprise daily production and inventory showed a declining trend. At the end of this month, there are maintenance plans for Yan Mine Xinjiang, Ocean Petroleum Fudao, and Zhongyan Anhui Hongsi, but some previously shut-down facilities are expected to resume production by the end of the month, anticipating steady supply adjustments.

Inventory: This week, market orders were well received, with a large number of pending shipments, leading to a reduction in enterprise inventory. Next week, enterprises are expected to continue de-stocking.

Demand: In agricultural rice areas, appropriate stockpiling was observed, with many taking advantage of low prices to follow up; the compound fertilizer factory maintained stable operations, with industrial demand continuing weakly, mainly following essential needs.