Urea Weekly: Market Supplies Tighten; Urea Prices Adjust Upwards Again

Fertilizer Price Index:
This week, domestic urea market prices maintained a slight fluctuation. The average price index for small urea granules is 2572.23, an increase of 24.81 from last week, up by 1.06%. The overall change in urea prices this week is minimal. In the first half of the week, the urea market was flat, with some companies slightly reducing their quotations. In the latter half, due to reduced company inventories and the transformation from stock accumulation to stock depletion, urea prices rebounded slightly. Regarding supply, frequent equipment malfunctions and increased maintenance this week have reduced market supply, supporting prices. Meanwhile, demand remains low, with sluggish purchase sentiments and low transaction volumes, even as international urea prices continue to fall.

Regional Urea Prices:
Specific price movements are as follows:

• Northeast: 2500-2560 RMB/ton
• North China: 2500-2670 RMB/ton
• Northwest: 2550-2560 RMB/ton
• Southwest: 2450-2800 RMB/ton
• East China: 2600-2660 RMB/ton
• Central China (small granules): 2580-2700 RMB/ton; (large granules): 2600-2620 RMB/ton
• South China: 2650-2700 RMB/ton

Industrial Chain Dynamics:

• Production: Domestic urea production this week is approximately 1.109 million tons, down 4.02% from the previous week but up 4.57% year-on-year.
• Raw Material Market: Coal prices have been stable this week, with limited price decreases. The coal market at major ports has witnessed low transaction volumes due to weather impacts, and coal stocks at some ports have decreased.
• Market Inventory: Inventory for large urea granules at ports was 195,000 tons this week, up by 31,000 tons from last week, and up by 125,000 tons year-on-year.
• Compound Fertilizer Industry: Prices remained strong this week, with businesses having plenty of pending orders.
• Melamine Industry: Melamine market prices continue to rise at high levels. Market supply is tight due to reduced production and maintenance, supporting higher prices.

International Market Prices:
China's bulk small granule FOB price: $372-380/ton, increased by $2-4/ton; Baltic FOB Price: $315-355/ton, decreased by $15-27/ton. China's large granule FOB price: $380-385/ton, decreased by $10/ton.

Outlook:

• Supply: Some companies are still working on pending and pre-received export orders, with a few new deals being closed.
• Inventory: Frequent equipment failures, multiple maintenance shutdowns, and reduced daily production have led to low inventory levels and a tight market supply.
• Demand: The pace of export accumulation has slowed, domestic demand remains off-season, and trading activity has slightly increased as traders look for bargains.