Urea Daily Review: Up, up, up! Spot prices continue to rise, factory shipments are tight (June 6)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on June 6 was 2,248.64, up 27.73 from yesterday, up 1.25% month-on-month, and down 31.53% year-on-year.

Urea futures market:

The price of the urea UR2309 contract continued to fluctuate after the opening of early trading today. In the afternoon, the market price fluctuated and remained unchanged. It plunged in the late session, falling to the lowest point of 1676, and closed at 1682 in the late session. The opening price of the Urea UR2309 contract: 1721, the highest price: 1729, the lowest price: 1676, the settlement price: 1709, the closing price: 1682. The closing price dropped by 60, or 3.44% compared with the settlement price of the previous trading day. The fluctuation range throughout the day is 1676-1729, and the spread is 53; The 09 contract has increased its position by 14232 lots today, and has held 393164 lots so far.

Spot market analysis:

Today, the price rise in China's urea spot market remains unabated. Except for Hubei and Sichuan, where there is sufficient supply, and sporadic price reductions have promoted the trading of new orders, prices in most regions continue to rise by 50-100 yuan/ton. At present, China is gradually slowly entering the wheat harvest stage from south to north. There are still appropriate purchases for compound fertilizer production, and companies are in tight supply, so prices have increased accordingly. Specifically, prices in Northeast China rose to 2,110 - 2,400 yuan/ton. Prices in North China rose to 2,130 - 2,310 yuan/ton. Prices in Northwest China rose to 2,300 - 2,310 yuan/ton. Prices in Southwest China fell to 2,000 - 2,500 yuan/ton. Prices in East China rose to 2,320 - 2,350 yuan/ton. The price of small and medium-sized particles in Central China rose to 2,230 - 2,400 yuan/ton, and the price of large particles rose to 2,350 - 2,370 yuan/ton. Prices in South China rose to 2,190 - 2,280 yuan/ton.

Market outlook forecast:

In terms of futures, today's futures prices stabilized first and then fell. The indication for the spot market was not strong, and the basis for the closing price gradually widened. On the supply side, the cost of coal is low, and factories still have a strong willingness to produce. In the later period, new urea production capacity will be released, and supply may continue to grow. The urea industry will face oversupply problems in the long run. On the demand side, it is currently the wheat harvest season, compound fertilizer production is still in progress, and appropriate replenishment is being made in agriculture and industry. Affected by the mentality of buying up but not buying down, market transactions have maintained a good situation in the short term. However, as the wheat harvest progresses, the enthusiasm for downstream production and terminal procurement will decrease, so the current market has certain risks. On the whole, the spot price of urea will maintain a small increase in the short term. In the long run, the price may gradually adjust back and wait for new markets to emerge.