Daily Review of Urea: Supply and demand relations return to weak market short-term downward consolidation (August 19)

Domestic urea price index:

According to Feiduo data, the urea small pellet price index on August 19 was 2,126.18, a decrease of 23.18 from last Friday, a month-on-month decrease of 1.08% and a year-on-year decrease of 16.17%.

Urea futures market:

Today, the opening price of the urea UR501 contract is 1875, the highest price is 1882, the lowest price is 1857, the settlement price is 1869, and the closing price is 1859. The closing price is 36 lower than the settlement price of the previous trading day, down 1.90% month-on-month. The fluctuation range of the whole day is 1857-1882; the basis of the 01 contract in Shandong is 181; the 01 contract has increased its position by 8680 lots today, and the position held so far is 159222 lots.

Today, urea futures prices continued to be weak and mainly downward. The fundamentals of urea itself are still at the dominant stage of the logic of strong supply and weak demand, and it is difficult for the market sentiment to be significantly boosted for the time being. The spot market has remained weak at the same time, and downstream willingness to receive goods is still cautious. The market expects manufacturers to continue to have downward quotations. Short-term urea is driven by a lack of news or may still remain weak.

Spot market analysis:

Today, the domestic urea market price continues to decline, the industry's maintenance equipment has recovered, the demand side remains weak and unchanged, the supply-demand relationship continues to be weak, company shipments are under pressure, and quotations are down.

Specifically, prices in Northeast China have stabilized at 2,130 - 2,160 yuan/ton. Prices in East China fell to 2,030 - 2,080 yuan/ton. The price of small and medium-sized particles in Central China fell to 2,030 - 2,250 yuan/ton, and the price of large particles fell to 2,120 - 2,180 yuan/ton. Prices in North China fell to 1,920 - 2,160 yuan/ton. Prices in South China fell to 2,190 - 2,240 yuan/ton. Prices in Northwest China fell to 2,140 - 2,200 yuan/ton. Prices in Southwest China fell to 2,070 - 2,450 yuan/ton.

Market outlook forecast:

In terms of factories, manufacturers continue to execute a small number of pending orders, new orders are not very active, shipping pressure continues to increase, inventory accumulates, and factory quotations are partially lowered, and the market trend continues to decline. In terms of the market, there is obvious pessimism in the market, weak trading atmosphere, weak prices and fluctuations. The current market lacks substantial positive guidance. The following mood of operators is low. They are cautious in entering the market. There is no heavy transaction volume. The market atmosphere is deadlock. On the supply side, the company's early maintenance equipment has been restored, the industry's supply has continued to increase, and Nissan has fluctuated within a narrow range and has gradually returned to high levels. On the demand side, agricultural demand is still in a vacant period, with poor support. There is some demand for autumn fertilizer to cover the warehouse. Downstream follow-up is cautious and slow, and the mentality is more wait-and-see, and appropriate follow-up on dips is maintained; the delivery of finished products from compound fertilizer factories is still poor, and the follow-up and improvement of raw materials is limited, and demand for other industries continues to remain stable.

On the whole, the current urea market continues to be weak and consolidated, and the market has no substantial positive support. It is expected that the urea market price will continue to be weak and volatile in the short term.