Urea Weekly: Low-Priced Indian Tender Weighs, Urea Market Under Pressure (2026-10-10)

01 Market Overview

1.1 FDD Price Index

This week, the domestic urea market as a whole remained in a stalemate with a weak bias. After the Indian tender concluded, prices came in below market expectations, weighing on sentiment and leaving the market without clear direction; combined with loose fundamentals, spot transactions for new orders were sluggish and market sentiment turned cautious, prompting some producers with weaker order intake to moderately lower their quotes. On the supply side, industry operating rates continued to recover, previously idled plants resumed production one after another, and daily production climbed to a high level, leaving the market broadly well supplied. On the inventory side, factory inventories showed structural divergence: some producers achieved phased destocking through export channels, but willingness to stock up in the circulation segment remained weak, and as downstream purchasing slowed, some regions still faced inventory-accumulation pressure. On the demand side, agricultural rigid demand gradually faded, and industrial downstream sectors such as compound fertilizer and board processing operated at low rates, with purchases mostly on a just-in-time basis; wait-and-see sentiment was strong and willingness to replenish in bulk was insufficient. On the export side, the third and fourth batches of self-disciplined urea export quotas were successively implemented, providing some policy support to the market but not yet forming a trend-driven pull; after the Indian tender result landed, the market reaction was muted and support for domestic spot was limited. Overall, the cost side provides some bottom support, but terminal demand has not yet formed an effective pull, and wait-and-see sentiment is heavy in the market; in the short term, the urea market will struggle to break out of its range-bound pattern. Going forward, focus on changes in plant operating rates, the progress of export order fulfillment, and the pace of winter-storage stockpiling.

According to FDD data: As of this Friday, the average domestic small-granule urea price index was 1,784.39, up +0.03 from last week, or +0.00% week-on-week.

In the first half of the week, the urea market moved sideways. The market was relatively quiet during the National Day holiday; previously idled plants resumed production one after another, daily production rose rapidly, the high-supply pattern strengthened further, and ample supply became evident. On the demand side, autumn fertilizer stocking progressed slowly, compound fertilizer operating rates were lower than the same period in previous years, and purchasing was mainly for immediate rigid needs; on the industrial side, the melamine and board sectors maintained rigid-demand follow-through with no incremental pull. Market focus centered on the Indian tender; before bids opened, upstream and downstream players mostly stayed on the sidelines, spot quotes were broadly stable, a few producers made minor adjustments, and overall trading was in a stalemate.

In the second half of the week, the urea market ran weak. After the Indian tender result landed, prices fell short of expectations, turning good news into bad news, and market sentiment weakened again. On the supply side, daily production stayed high and operating rates were at a relatively high level for the same period in recent years; enterprise inventories accumulated during the holiday, and although faster export shipments later shifted inventories from factory to port, the absolute level of enterprise inventories remained at a historical high for the same period, so inventory pressure was not substantively eased. On the demand side, agricultural demand was broadly weak, industrial purchasing slowed, downstream willingness to restock was insufficient, and incremental support was lacking. Futures weakened in tandem, with the main contract under pressure and moving lower; spot prices in some regions softened, and overall trading sentiment was noticeably quieter than in the first half of the week.

1.2 Delivery-Region Quotations

Specifically, prices in Northeast China were stable at 1,790–1,810 yuan/t. Prices in East China fell to 1,730–1,750 yuan/t. In Central China, small and medium-granule prices fell to 1,730–1,920 yuan/t, while large-granule prices rose to 2,020–2,050 yuan/t. Prices in North China fell to 1,590–1,800 yuan/t. Prices in South China rose to 1,820–1,850 yuan/t. Prices in Northwest China were stable at 1,860–1,910 yuan/t. Prices in Southwest China were stable at 1,660–1,900 yuan/t.

Urea Small-Granule Market Quotation Overview (yuan/t)

02 Industry Chain Dynamics

2.1 Daily Production

Output: This week, domestic urea output was about 1.5328 million tonnes, up +90,300 tonnes from last week, or +6.26% week-on-week and +10.26% year-on-year; daily output was 219,000 tonnes. During the week, industry daily output exceeded 210,000 tonnes; supply stayed high and volatile, and the supply side remained ample. The weekly average daily output was 219,000 tonnes, up +12,900 tonnes from last week. Provinces with notably higher week-on-week output included Hebei, Henan, Jiangxi, Shandong, and Shaanxi; no province saw a notable week-on-week decrease.

Operating rate: The domestic urea industry operating rate was about 90.62%, up +5.34% week-on-week and +9.98% year-on-year; the weekly operating rate rose and was higher than the same period last year. Provinces with week-on-week gains in operating rate included Hebei, Henan, Jiangxi, Shandong, and Shaanxi; essentially no province saw a decline.

By granule type, large-granule urea output was about 330,800 tonnes, up 12,100 tonnes from last week, or +3.80% week-on-week, and up 61,600 tonnes year-on-year, or +22.88%; the large-granule operating rate was about 95.50%, +3.50% from last week and +14.56% from the same period last year. Small and medium-granule urea output was about 1.2020 million tonnes, up +78,300 tonnes from last week, or +6.97% week-on-week, and up +150,700 tonnes year-on-year, or +14.33%; the small and medium-granule operating rate was about 89.37%, +5.82% from last week and +8.81% from the same period last year.

By process, coal-based urea output was about 1.2434 million tonnes, up +90,300 tonnes from last week and +193,300 tonnes year-on-year; the operating rate was about 93.13%, +6.76% from last week and +4.74% from the same period last year. Gas-based urea output was about 289,400 tonnes, up +0 tonnes from last week and +19,000 tonnes year-on-year; the operating rate was about 81.22%, +0.00% from last week and +7.83% from the same period last year.

2.2 Plant Dynamics

Domestic Urea Enterprise Maintenance Overview for the Week

Weekly Data Statistics of Domestic Urea Sample Enterprises Scheduled for Maintenance

2.3 Market Inventory

Enterprises: This week, enterprise inventory was about 1.4827 million tonnes, up 56,400 tonnes from last week, or +3.95% week-on-week, and up 264,500 tonnes year-on-year, or +21.71%. This week, domestic urea enterprise inventories showed a fairly notable accumulation trend: first, because of the holiday period, which created shipping obstacles in some regions; second, because outlying regions were in a phased gap period, and with insufficient downstream orders, enterprises accumulated inventory faster. Provinces with increased enterprise inventory: Anhui, Gansu, Hebei, Henan, Hubei, Jiangxi, Inner Mongolia, Shaanxi, and Sichuan. Provinces with decreased enterprise inventory: Hainan, Heilongjiang, Jiangsu, Qinghai, Shandong, Shanxi, Xinjiang, and Yunnan.

Ports: Total port inventory was 542,900 tonnes, down -6,700 tonnes from last week, or -1.22% week-on-week, and down -6,500 tonnes year-on-year, or -1.18%. During this week, port inventory fluctuated within a narrow range, with both departures and arrivals occurring. Mainly due to the holiday, shipping at some ports stalled, and most ports saw only minor fluctuations. Overall, port inventory changed little, with both outbound and inbound cargoes present. The main changes were: large-granule cargoes arriving at Lianyungang, Qingdao, Longkou, and Yantai ports, and small-granule cargoes arriving at Zhenjiang port; small-granule cargoes departing from Tianjin and Huanghua ports.

Large granule: This week, domestic large-granule urea port inventory was 402,900 tonnes, up +13,300 tonnes from last week, or +3.41% week-on-week, and up +163,900 tonnes year-on-year; large-granule urea port volume increased slightly during the week and was higher than the same period last year.

Small granule: This week, domestic small-granule urea port inventory was 140,000 tonnes, down -20,000 tonnes from last week, or -12.50% week-on-week, and down -74,000 tonnes year-on-year; small-granule urea port inventory decreased slightly during the week and was lower than the same period last year.

2.4 Compound Fertilizer Industry

This week, the domestic compound fertilizer market as a whole maintained a weak consolidation, with autumn fertilizer gradually entering its final stage; the market saw mixed bullish and bearish factors, and games were fairly evident, with overall trading slowing.

As of this Friday, the domestic 45%S price index was 3,298.33; the 45%CL price index was 2,812.73.

On the cost side, raw material trends diverged across varieties, with upstream urea, phosphate, and potash markets fluctuating back and forth; support from raw materials to compound fertilizer was sometimes strong and sometimes weak, forming some bottom support, but the momentum to pull finished-product prices upward was insufficient, and production pressure on enterprises persisted alongside raw material volatility. On the supply side, this week the compound fertilizer market operating rate was 35.80%, up 2.39% week-on-week, a slight rise during the week. Most producers focused on fulfilling previously placed orders, scheduling production on demand, and adjusting operating rates flexibly; some producers accelerated inventory clearance and appropriately controlled new output, so overall market supply was relatively ample. On the demand side, as autumn sowing fertilization in the north progressively landed, grass-roots rigid demand gradually weakened; distributors in the circulation segment generally maintained a light-inventory approach, focusing on consuming existing stock, with low enthusiasm for large-scale replenishment, and negotiation room on actual transactions widened somewhat. At this stage, winter storage has not yet formally started, downstream wait-and-see sentiment is relatively strong, and no new demand relay has formed; meanwhile, overseas geopolitical tensions continue to disrupt, and exports have not formed an obvious incremental pull. Overall, during the gap period when autumn fertilizer is wrapping up and winter-storage expectations have not yet landed, the compound fertilizer market may be mainly range-bound; going forward, the focus should be on raw material single-nutrient fertilizer trends, the progress of remaining grass-roots autumn fertilizer shipments, and the implementation of winter-storage policy.

2.5 Melamine Industry

This week, the domestic melamine market as a whole mainly moved within a narrow range, with fairly evident bullish-bearish games in the market, mainstream spot sentiment leaning toward wait-and-see, and overall trading pace moderate. On the cost side, the upstream urea market fluctuated, causing raw material support to waver repeatedly; the cost side gives melamine no clear direction, and production profits adjust with raw material volatility. On the supply side, this week the melamine market operating rate was 55.31%, up 8.61% from last week. Industry plants were in a mix of maintenance and restart: some previously idled plants gradually resumed production, creating expectations of supply release, while a few enterprises remained shut down for maintenance, partially offsetting the increment, so overall industry operating rates fluctuated. Producers had some intention to hold prices firm, but as restarts bring potential supply increases, upward momentum was somewhat constrained. On the demand side, the domestic downstream board industry's follow-through was limited overall, end-use consumption showed no obvious improvement, and downstream factories mostly stuck to just-in-time purchasing, with weak willingness for bulk replenishment and low acceptance of high-priced material. On the export side, overseas market inquiries remained at a normal level, geopolitical factors continued to disrupt the pace of international trade flows, external markets failed to form a strong pull, and export order growth was limited. Overall, given the tug-of-war between supply-recovery expectations and weak downstream demand, the melamine market may be mainly range-bound; going forward, keep tracking upstream raw material trends, domestic downstream board operating rates, and overseas order follow-through.

2.6 International Market Quotations

China bulk small-granule FOB at USD 320.01–355.01/t, down 25–45/t from last week; Black Sea small-granule port FOB at USD 375.01–405.01/t, unchanged from last week; Baltic small-granule port FOB at USD 370.01–400.01/t, unchanged from last week; Middle East small-granule port FOB at USD 410.01–435.01/t, down 15–20/t; Brazil small-granule CFR at USD 430.01–445.01/t, high end down 5/t; India CFR at USD 352.01–356.01/t, down 38/t from last week.

Iran large-granule port FOB at USD 335.01–350.01/t, unchanged from last week; Egypt (Europe) large-granule port FOB at USD 464.01–510.01/t, down 25–46/t. Brazil large-granule CFR at USD 455.01–485.01/t, down 10/t; Southeast Asia large-granule port CFR at USD 450.01–475.01/t, down 5–10/t; China large-granule port FOB at USD 410.01–430.01/t, down 20/t.

03 Outlook

Supply: Industry plants overall maintained flexible production; going forward, some previously idled plants are expected to restart, though seasonal load reductions are also possible. Exports can still serve as a phased outlet for cargo diversion, but the pace of external purchasing is uncertain and cannot sustainably absorb large domestic volumes.

Inventory: After demand weakens, factory-side inventories may first accumulate upward; thereafter, low-price reserve stockpiling and similar moves may bring some destocking expectations, but overall inventory in the social circulation segment still faces pressure. If downstream buying slows, cargoes can easily pile up again, and inventory changes will continue to dictate the market's pace.

Demand: At this stage, direct agricultural fertilizer use is gradually fading, downstream compound fertilizer enterprises are operating at generally low rates, and raw material purchasing remains just-in-time. The pace and scale of export quotas determine whether excess capacity can be effectively absorbed, and this is the key to phased bottom support.