Daily review of urea: Market supply and demand are tight and quotes continue to rise (May 30)

China Urea Price Index:

According to calculations from Feiduo data, the urea small pellet price index on May 30 was 2,397.09, an increase of 3.64 from yesterday, a month-on-month increase of 0.15% and a year-on-year increase of 14.69%.

Urea futures market:

Today, the opening price of the urea UR409 contract is 2218, the highest price is 2230, the lowest price is 2178, the settlement price is 2205, and the closing price is 2184. The closing price is 2 lower than the settlement price of the previous trading day, down 0.09% month-on-month, and the fluctuation range throughout the day is 2178-2230; the basis of the 09 contract in Shandong is 206; the 09 contract has reduced its position by 3438 lots today, and so far, the position is 237150 lots.

Today's urea futures prices mainly open higher and lower with the market environment. Affected by yesterday's document "Energy Efficiency Benchmarking Levels and Benchmark Levels in Key Areas of High-Energy-Consumption Industries", the commodity market was generally operating strongly at night, driving urea to a high altitude today. However, this policy has been introduced before, and the actual impact on the current situation is relatively limited. The overall commodity market sentiment has fallen. Urea prices also fluctuate within a narrow range with the market environment. Although the urea fundamentals show signs of marginal weakening, actual market demand still has certain support., superimposed on repeated macro sentiments, urea futures prices may remain high and volatile in the short term.

Spot market analysis:

Today, China's urea market prices continue to rise slightly while maintaining stability. New orders in the market are cautious, supply and demand remain tense, and company quotations are mostly stable and consolidated.

Specifically, prices in Northeast China have stabilized at 2,330 - 2,380 yuan/ton. Prices in East China rose to 2,370 - 2,430 yuan/ton. The price of small and medium-sized particles in Central China has stabilized at 2,340 - 2,470 yuan/ton, and the price of large particles has stabilized at 2,320 - 2,370 yuan/ton. Prices in North China rose to 2,220 - 2,410 yuan/ton. Prices in South China rose to 2,440 - 2,490 yuan/ton. Prices in the northwest region are stable at 2,390 - 2,400 yuan/ton. Prices in Southwest China are stable at 2,300 - 2,700 yuan/ton.

Market outlook forecast:

In terms of factories, manufacturers are receiving new orders in general and continue to support them. During successive shipments, inventories remain low and decrease within a narrow range, and current offers continue to fluctuate at high levels. In terms of the market, the transaction volume of low-end goods in the market has increased, the enthusiasm of operators for trading has weakened compared with the previous period, and the overall wait-and-see atmosphere is strong. The market is temporarily strong and mainly operating, with a limited fluctuation range. In terms of supply, recent equipment failures in the industry have resulted in a reduction in production. In addition, the equipment for early maintenance has not yet been restored. The supply increase has been slow, and good supply remains for a short time. On the demand side, farmers need to follow up on replenishment in stages, and some topdressing needs are also in the process of stocking up; industrial compound fertilizer factory production is still replenishing, and orders are replenished at low prices. The overall wait-and-see atmosphere is strong, and procurement follow-up is cautious.

On the whole, urea companies currently have low inventories and the market supply and demand relationship continues to be tight, which continues to support the market's rise. Given the strong fundamentals, it is expected that urea prices will remain strong in the short term.