Daily Review of Urea: Low-price transactions in the market have improved, and corporate quotation ranges are sorted out (July 25)

Domestic urea price index:

According to Feiduo data, the urea small pellet price index on July 25 was 2,218.18, a decrease of 3.18 from yesterday, a month-on-month decrease of 0.14% and a year-on-year decrease of 9.50%.

Urea futures market:

Today, the opening price of the urea UR409 contract is 2001, the highest price is 2009, the lowest price is 1985, the settlement price is 1997, and the closing price is 10% lower than the settlement price of the previous trading day, down 0.50% month-on-month. The fluctuation range of the whole day is 1985-2009; the basis of the 09 contract in Shandong is 139; the 09 contract has reduced its position by 3625 lots today, and so far, it has held 153368 lots.

Today, urea futures prices fluctuated within a narrow range and were mainly downward. There is no obvious opportunity for improvement in urea fundamentals in the short term, and the market logic continues to focus on the issue of strong supply and weak demand. During the week, output was still growing, but the accumulation rate declined slightly. Market demand may have certain resilience and some support for market prices. However, the general logical direction cannot be falsified for the time being, and the short-term urea price may remain weak and volatile.

Spot market analysis:

Today, the domestic urea market prices are mixed and consolidated within a narrow range. Recently, market prices have been falling. Companies have closed at low prices, and some have rebounded slightly. The current overall market demand is still cautious in following up, and the market's upward trend is limited.

Specifically, prices in Northeast China have stabilized at 2,210 - 2,240 yuan/ton. Prices in East China rose to 2,120 - 2,170 yuan/ton. The price of small and medium-sized particles in Central China has risen to 2,110 - 2,350 yuan/ton, and the price of large particles has stabilized at 2,180 - 2,210 yuan/ton. Prices in North China fell to 2010- 2,260 yuan/ton. Prices in South China fell to 2,240 - 2,340 yuan/ton. Prices in the northwest region are stable at 2,300 - 2,360 yuan/ton. Prices in Southwest China fell to 2,120 - 2,550 yuan/ton.

Market outlook forecast:

In terms of factories, after continuous downward testing of quotations this week, some manufacturers have been able to obtain orders. Receipts of low-priced goods have improved. Quotes have increased slightly, restricting order acceptance. Quotes from other surrounding factories have continued to lower their quotations to attract orders, and they have been waiting for a short period of time. Under the support of the situation, the quotation has remained stable and increased slightly. In terms of the market, low-price transactions on the market have improved, with low-end trading active and downstream buying on dips, which has boosted the dull trading atmosphere in the market in recent days. The market transaction atmosphere has warmed up, and the short-term market has been mainly consolidated in a narrow range. On the supply side, industry start-ups continue to be high, capacity utilization continues to remain high at more than 80%, and supply continues to be loose. On the demand side, the current market price is low, and downstream buy from the bottom. Most of them just need to follow up, and market transactions are okay. However, the overall mentality of the industry is still cautious, and the follow-up release of demand is limited.

On the whole, after urea companies continue to lower their quotations, transactions at the low-end market have improved and quotations have risen. However, follow-up by demand is relatively limited. It is expected that the urea market price will rise slightly in a short period of time and then stabilize, making it difficult to continue to rise.