Daily Review of Urea: Companies are about to shrink, market conditions are operating firmly (December 12)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on December 12 was 2,516.50, down 6.36 from yesterday, down 0.25% month-on-month, and down 10.04% year-on-year.

Urea futures market:

Today, the opening price of the Urea UR405 contract is 2242, the highest price is 2300, the lowest price is 2240, the settlement price is 2279, and the closing price is 2299. The closing price is 51% higher than the settlement price of the previous trading day, and the month-on-month increase is 2.27%. The fluctuation range of the whole day is 2240-2300; the basis of the 05 contract in Shandong is 151; the 05 contract has increased its position by 16605 lots today, and so far, it has held 141,600 lots.

Spot market analysis:

Today, China's urea prices are deadlocked and downward, with a small magnitude. Currently, company quotations are mostly stable, market transaction prices are mostly low, and market conditions are operating firmly.

Specifically, prices in Northeast China have stabilized at 2,500 - 2,530 yuan/ton. Prices in North China fell to 2,330 - 2,540 yuan/ton. Prices in Northwest China fell to 2,460 - 2,470 yuan/ton. Prices in Southwest China are stable at 2,480 - 2,800 yuan/ton. Prices in East China have stabilized at 2,450 - 2,500 yuan/ton. The price of small and medium-sized particles in Central China has stabilized at 2,450 - 2,650 yuan/ton, and the price of large particles has stabilized at 2,580 - 2,660 yuan/ton. Prices in South China fell to 2,590 - 2,640 yuan/ton.

Market outlook forecast:

In terms of factories, prices have remained stable under the support of factories waiting for orders. During the process of processing agency orders, factories in some mainstream regions have gradually reduced the number of shipments, and prices have been slightly loosened and lowered. Currently, under the influence of market news, companies are under pressure to increase prices, and prices are operated more cautiously. On the market side, the market is bearish and driven by emotions, making it difficult for prices to move upwards. In terms of inventory, due to the impact of weather and inconvenient transportation in recent days, the shipment of goods from factories in the north has been restricted, and the inventory has increased. In terms of supply, although the market supply is shrinking, the supply is relatively sufficient for the current market demand. In the short term, supply will continue to decline, and Nissan will gradually reduce its production. In terms of demand, the current market demand is mostly a small amount of phased purchases. Agricultural demand is mainly reserved. The market is sporadic and the industry has a wait-and-see mentality; industrial demand compound fertilizer companies still maintain a high start-up status, with good demand, and low prices just need to follow up.

On the whole, urea companies are currently preparing to shrink, downstream demand is following up a little, and the overall market changes are small. It is expected that urea market prices will remain stable and consolidated in a short period of time.