Daily Review of Urea: Market supply and demand continue to be loose and the trading atmosphere is deadlocked (July 29)

Domestic urea price index:

According to Feiduo data, the urea small pellet price index on July 29 was 2,204.82, a decrease of 7.91 from last Friday, a month-on-month decrease of 0.36% and a year-on-year decrease of 13.78%.

Urea futures market:

Today, the opening price of the Urea UR409 contract is 1992, the highest price is 2003, the lowest price is 1983, the settlement price is 1993, and the closing price is 1995. The closing price is 4 lower than the settlement price of the previous trading day, down 0.20% month-on-month. The fluctuation range of the whole day is 1983-2003; the basis of the 09 contract in Shandong is 135; the 09 contract has reduced its position by 4055 lots today, and so far, it has held 144285 lots.

Today, urea futures prices remained mainly volatile in a narrow range. The market trading logic still focuses on the weakening of its own fundamentals, but the downside is supported by low absolute inventories and costs. In the short term, the market may maintain weak and volatile operations and wait for new drivers to emerge.

Spot market analysis:

Today, the domestic urea market price is stable and low, and the market is sluggish for high-priced transactions. Most company quotations continue to be stable and lowered, and the market atmosphere is deadlocked.

Specifically, prices in Northeast China fell to 2,160 - 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 fell to 2,100 - 2,300 yuan/ton, and the price of large particles stabilized at 2,180 - 2,210 yuan/ton. Prices in North China fell to 2020-2210 yuan/ton. Prices in South China fell to 2,240 - 2,340 yuan/ton. Prices in Northwest China fell to 2,250 - 2,340 yuan/ton. Prices in Southwest China fell to 2,100 - 2,500 yuan/ton.

Market outlook forecast:

In terms of factories, the transactions of new orders by manufacturers continue to be cold, the quotations continue to be lowered to attract orders, and the high-end market quotations continue to fall. Some quotations are stable and are being implemented in advance, and a small number of pending orders have accumulated. Currently, with the support of pending orders, corporate quotations are in a stalemate. In terms of the market, most market transactions are at the low-end, transaction prices continue to fall, downstream follow-up is weak, most of them are cautious and wait-and-see, follow-up is limited, price upward motivation is insufficient, and the market atmosphere is weak and stable. On the supply side, new production capacity in the industry has been released, market supply continues to be loose, downstream follow-up is poor, shipments are under pressure, and corporate inventories continue to accumulate. On the demand side, the demand side is still weak. In the off-season of agricultural fertilization, follow-up is limited. Affected by the current high temperature and rainy weather, downstream operators are cautious in purchasing and have low willingness to receive goods. Although the operating rate of compound fertilizer factories is increasing, the demand for raw materials is limited, and the purchasing mentality is still cautious.

On the whole, the current supply and demand side of the urea market is loose, the market operation is weak, and prices are under pressure downward. It is expected that the urea market price will continue to stabilize and decline in a short period of time, and the market lacks favorable support.