Urea Weekly Review: Cautious Buying and Slow Follow-Up, Prices Hold Steady

Market Overview

Fertoduo Price Index

This week, the urea market remained generally stable. Buyers showed a cautious attitude towards new orders, leading to slower purchase rates. Enterprise quotes experienced minor adjustments within a narrow range.

According to Fertoduo data, as of this Friday, the average domestic small granular urea price index was 2393.93, down by 1.53 from last week, a 0.06% decrease.

Weekly Market Trends

• Early Week: With previous bullish factors mostly exhausted, new orders slowed significantly. Manufacturers were proactive in selling, with flexible and slightly lower quotes. However, pending orders continued to support firm prices. Overall, the market saw minor fluctuations, with high prices holding steady. Market sentiment was cautious, with stakeholders observing trends carefully.
• Midweek: Some low-priced transactions occurred, but the overall volume was limited. High-priced transactions were scarce, leading some enterprises to lower their quotes to attract orders. Despite this, pending orders kept quotes relatively firm. The market saw high prices hold steady with slight adjustments.

Regional Price Quotes

• Northeast: Prices increased to 2330-2380 yuan/ton.
• East China: Prices increased to 2370-2420 yuan/ton.
• Central China: Small granular prices increased to 2330-2470 yuan/ton; large granular prices decreased to 2320-2370 yuan/ton.
• North China: Prices increased to 2220-2410 yuan/ton.
• South China: Prices decreased to 2440-2480 yuan/ton.
• Northwest: Prices remained stable at 2390-2400 yuan/ton.
• Southwest: Prices decreased to 2300-2700 yuan/ton.

Futures Market

As of Thursday, the Zhengzhou Commodity Exchange recorded 2797 urea futures contracts, an increase of 196 from the previous week.

Industry Chain Dynamics

Daily Production and Operating Rates

• Production: This week, domestic urea production was approximately 1.2061 million tons, a decrease of 4200 tons (0.35%) from last week, but a year-on-year increase of 3.36%. Daily production was 172,300 tons. The industry's daily production continued to decline slightly due to slow recovery from maintenance, despite significant production increases in some regions.
• Operating Rates: The operating rate for the domestic urea industry was approximately 79.57%, down 0.28% from last week but up 0.52% year-on-year. The decline in operating rates continued but remained higher than the same period last year.

Supply and Demand

• Inventory:Enterprises: Inventories were about 298,100 tons, a decrease of 23,100 tons (7.19%) from last week, and 862,200 tons (74.31%) from last year.Ports: Total port inventories were 167,000 tons, a decrease of 11,000 tons (6.18%) from last week, but an increase of 103,000 tons (160.94%) from last year.
• Demand: Agricultural and industrial demand showed cautious follow-up, with slow purchasing rates. The market saw limited new transactions and high prices holding steady with minor adjustments.

Compound Fertilizer Industry

• Price and Demand: The market saw stable to slight increases in prices, with good downstream follow-up. As of this Friday, the 45% S price index was 2824.17, and the 45% CL price index was 2409.09.
• Supply: The operating rate for the compound fertilizer market was 49.88%, down 0.59% from last week. Utilization rates slightly decreased, but finished product inventories continued to decline.

Melamine Industry

• Price and Supply: The melamine market continued to operate weakly, with slow price declines. New orders were limited, but pending orders persisted. Utilization rates decreased slightly, with some facilities undergoing maintenance.
• Demand: Domestic demand remained weak, sustaining limited procurement, insufficient to support the market significantly.

International Market Prices

• Small Granular Urea: China FOB: $330-337/ton, stable from last week.Baltic FOB: $270-290/ton, up by $10/ton.
• Large Granular Urea: China FOB: $330-340/ton, stable from last week.Iran FOB: $275-276/ton, up by $9-11/ton from last week.

Market Outlook

• Supply: Maintenance recovery is slow, with daily production increases possibly below expectations.
• Inventory: Continued shipments maintain low inventory levels.
• Demand: Some regions still have fertilizer demand for rice and corn. Industrial compound fertilizer production is extending, with ongoing downstream demand.