Daily Review of Urea: Market benefits gradually disappear, price center of gravity falls again (June 15)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on June 15 was 2,110.68, down 25.45 from yesterday, down 1.19% month-on-month, and down 35.59% year-on-year.

Urea futures market:

The price of urea UR2309 contract stabilized first and then rose today. The futures price continued to fluctuate after the opening of early trading, falling to the lowest point of 1660 in the late morning. In the afternoon, the futures price began to continue to rise, peaking at 1721 and closing at 1719 at the end of the day. The opening price of the Urea UR2309 contract: 1670, the highest price: 1721, the lowest price: 1660, the settlement price: 1688, and the closing price: 1719. Compared with the settlement price of the previous trading day, the closing price increased by 37, or 2.20%. The daily fluctuation range is 1660-1721, and the spread is 61; The 09 contract has reduced its position by 13925 lots today, and has held 425104 lots so far.

Spot market analysis:

The spot market price of urea in China fell partially today, with the mainstream quotation in Dali, Yunnan falling by 100 yuan/ton. Quotes in some regions even fell below the previous round of lows, and trading in new orders on the market was limited. The main reason was that agricultural demand was gradually declining, industrial demand was also very limited, and market supply was still sufficient. The contradiction between supply and demand has reappeared, and the market lacks good support. Specifically, prices in Northeast China have stabilized at 2,080 - 2,260 yuan/ton. Prices in North China fell to 1,870 - 2,200 yuan/ton. Prices in Northwest China fell to 2,000 - 2,070 yuan/ton. Prices in Southwest China fell to 2,000 - 2,250 yuan/ton. Prices in East China fell to 2,040 - 2,150 yuan/ton. The price of small and medium-sized particles in Central China fell to 1,950 - 2,330 yuan/ton, and the price of large particles fell to 2,120 - 2,150 yuan/ton. Prices in South China are stable at 2,150 - 2,200 yuan/ton.

Market outlook forecast:

In terms of futures, today's futures prices are up, and the market prices are picking up may bring benefits to the spot. There is a large amount of arbitrage space in the market, and we need to continue to pay attention to the direction. Fundamentally speaking, maintain the early judgment: First of all, the pressure on the supply side is high. In the past few days, when the demand for hoarding surged, the pressure has not been evident. However, with the increase in urea production capacity in the later period and the demand for hoarding decreased, the supply of urea has restrained the market, and this wave of urea has soared and plunged, and the actual removal of warehouse is not ideal. Secondly, looking at the demand side, the current market for corn base fertilizer in North China and topdressing in northwest and northeast China has ended. Industrial demand is light. The compound fertilizer industry has started to decline, and demand has gradually declined. In terms of cost, port coal remains low and cost support is insufficient. In terms of exports, the price of printed labels has dropped compared with the price of China's spot market, which has put pressure on the trend of the Chinese market. Overall, the market has a strong negative atmosphere in the short term, and it is expected that the market will continue to decline mainly in the short term.