Urea Daily Review: Companies are ready to support downstream continue to follow up, weak market operation is deadlocked (August 5)

Domestic urea price index:

According to Feiduo data, the urea small pellet price index on August 5 was 2,209.09, a decrease of 3.18 from last Friday, a month-on-month decrease of 0.14% and a year-on-year decrease of 11.64%.

Urea futures market:

Today, the opening price of the Urea UR409 contract is 2045, the highest price is 2069, the lowest price is 2041, the settlement price is 2057, and the closing price is 2062. The closing price is flat compared with the settlement price of the previous trading day. The fluctuation range of the whole day is 2041-2069; the basis of the 09 contract in Shandong is 78; the 09 contract has increased its position by 1024 lots today, and so far, it has held 124789 lots.

Today, urea futures prices opened sharply lower due to the decline in market sentiment on Friday night, and subsequently recovered slightly with the market environment. At present, urea's own fundamentals are difficult to improve, and market fluctuations are more affected by the overall market environment and its own news. Although there will be emotional low-price replenishment in downstream demand, it is difficult to see short-term sustained replenishment. If prices continue to rebound, demand may be difficult to follow up. In the short term, we can wait and see how the overall commodity market sentiment evolves.

Spot market analysis:

Today, the domestic urea market price fell slightly, and company quotations were mostly stable. In the early stage, the situation of low-price orders was better, and execution was mainly due to be carried out. The downstream continued to follow up and showed weakness, and the market was deadlocked and stable.

Specifically, prices in Northeast China have stabilized at 2,150 - 2,190 yuan/ton. Prices in East China fell to 2,130 - 2,190 yuan/ton. The price of small and medium-sized particles in Central China has risen to 2,140 - 2,300 yuan/ton, and the price of large particles has stabilized at 2,180 - 2,230 yuan/ton. Prices in North China fell to 2,050 - 2,200 yuan/ton. Prices in South China rose to 2,280 - 2,350 yuan/ton. Prices in the northwest region are stable at 2,240 - 2,330 yuan/ton. Prices in Southwest China are stable at 2,100 - 2,500 yuan/ton.

Market outlook forecast:

In terms of factories, manufacturers have accumulated low-priced orders in the early stage. The current offers are mostly firm and stable, the price adjustment is deadlocked, and the main execution is underway. In terms of the market, the market trading atmosphere has turned weaker. The current market offers are high, downstream players are less willing to buy, and new orders are slowing down. The overall wait-and-see atmosphere is biased, and the mentality is still cautious. The market's new orders are tepid, and the overall pursuit of high prices is limited. In terms of supply, although the industry's Nissan is declining slightly, the supply is still abundant. Equipment maintenance and restart alternate. The overall supply is weak in the face of price support, and the supply decline is limited. On the demand side, agricultural demand is followed up in a small amount, but replenishment is relatively scattered, with local topdressing mainly in a small amount; the construction of compound fertilizer factories continues to increase, and the replenishment of raw materials is followed up, mainly based on just-needed procurement. The overall demand is expected to increase. Currently, downstream companies are resistant to high prices and are cautious in following up.

On the whole, urea companies are currently mainly executing, downstream manufacturers are reluctant to wait and see to high-priced sources of goods, demand follow-up is limited, and market conditions are deadlocked. It is expected that urea market prices will stabilize first and then fall in a short period of time, and their rise will be blocked.