Daily Review of Urea: Loose Supply and demand relationship and weak market operation (July 8)

Domestic urea price index:

According to Feiduo data, the urea small pellet price index on July 8 was 2,364.23, a decrease of 5.45 from last Friday, a month-on-month decrease of 0.23% and a year-on-year increase of 4.09%.

Urea futures market:

Today, the opening price of the Urea UR409 contract is 2124, the highest price is 2129, the lowest price is 2080, the settlement price is 2096, and the closing price is 36 lower than the settlement price of the previous trading day, down 1.69% month-on-month. The fluctuation range of the whole day is 2080-2129; the basis of the 09 contract in Shandong is 195; the 09 contract has reduced its position by 12084 lots today, and so far, it has held 195297 lots.

Today, urea futures prices are mainly weak and downward, mainly due to the weakening of the overall commodity market environment. The weak expectation logic of increasing supply and decreasing demand continues, and speculative funds have left the market significantly. Short-term fundamental changes in urea itself are difficult to form a strong driving force, and the impact of news such as printing and labeling is also difficult to have practical support under policy supervision. It is mainly due to the wide fluctuations in the market environment and waiting for its own logic to be fulfilled.

Spot market analysis:

Today, domestic ureamarketPrices are weak and downward, with a small number of new orders in the market, and sufficient supply in the industry. Under the influence of the negative, the market transaction atmosphere has declined and prices have stabilized and lowered.

Specifically, prices in Northeast China have stabilized at 2,390 - 2,460 yuan/ton. Prices in East China fell to 2,270 - 2,330 yuan/ton. The price of small and medium-sized particles in Central China fell to 2,260 - 2,450 yuan/ton, and the price of large particles stabilized at 2,260 - 2,310 yuan/ton. Prices in North China fell to 2,180 - 2,460 yuan/ton. Prices in South China fell to 2,350 - 2,430 yuan/ton. Prices in the northwest region are stable at 2,410 - 2,430 yuan/ton. Prices in Southwest China are stable at 2,250 - 2,650 yuan/ton.

Market outlook forecast:

In terms of factories, manufacturers have gradually reduced their orders, and offers have gradually loosened downward slightly. Currently, corporate inventories continue to remain low, and price decline is limited. In terms of the market, market transactions have slowed down and the market operation has become deadlocked. It is currently in the off-season of domestic demand. In addition, pressure on export control remains. The news has affected short-term market sentiment, and the market has mainly fluctuated in the short term. In terms of supply, the supply is relatively sufficient. The current industry's profits are still good. Enterprises are highly motivated to produce and have sufficient supply. In the later period, new devices will be put into production, and the industry's supply may be further expanded. On the demand side, agricultural topdressing continues. Due to the recent rainfall, the dry weather in the north has eased. Agricultural demand is mostly regional, with phased replenishment mainly; industrial demand is lukewarm, and there is still a certain demand downstream. Buy more on dips and have a weak mentality.

On the whole, the current demand in the urea market is weak, supply is expected to increase, and the industry has low follow-up sentiment. It is expected that the weakness in the urea market price will be mainly consolidated downward in the short term.