Daily Review of Urea: The market lacks new favorable conditions to support the temporary stalemate and consolidation (August 26)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on August 26 was 2,104.64, a decrease of 7.73 from last Friday, a month-on-month decrease of 0.37% and a year-on-year decrease of 18.30%.

Urea futures market:

Today, the opening price of the Urea UR501 contract is 1870, the highest price is 1897, the lowest price is 1850, the settlement price is 1870, and the closing price is 1892. The closing price is 16% higher than the settlement price of the previous trading day, and the month-on-month increase is 0.85%. The fluctuation range of the whole day is 1850-1897; the basis of the 01 contract in Shandong is 138; the 01 contract has increased its position by 502 lots today, and so far, it has held 151682 lots.

Today's overall urea futures prices were mainly bottomed out. Affected by the clear opening of the interest rate cut cycle overseas, the macro sentiment was strong, and some short sellers left the safe haven in the late session, forming a rapid rise. The fundamentals of urea itself have not improved significantly for the time being, and the general logic of strong supply and weak demand and regulatory suppression still exist. In the short term, market fluctuations may increase risks due to repeated macro sentiments, but a reversal drive has not yet formed.

Spot market analysis:

Today, the transaction of new orders in China's urea market has stabilized, the volume of orders received by manufacturers has accumulated, the offer has temporarily remained firm, and the market has temporarily been deadlocked and consolidated. In addition, supply continues to increase, and company quotations are under pressure and are slightly lowered.

Specifically, prices in Northeast China have stabilized at 2,100 - 2,130 yuan/ton. Prices in East China have been lowered to 2020-2080 yuan/ton. The price of small and medium-sized particles in Central China has been lowered to 2,020 - 2,250 yuan/ton, and the price of large particles has been lowered to 2,130 - 2,180 yuan/ton. Prices in North China have been lowered to 1,900 - 2,120 yuan/ton. Prices in South China have been lowered to 2,150 - 2,230 yuan/ton. Prices in the northwest region are stable at 2,080 - 2,150 yuan/ton. Prices in Southwest China are stable at 2,050 - 2,450 yuan/ton.

Market outlook forecast:

In terms of factories, manufacturers had a better situation in low-end orders acquisitions last week. The cumulative increase in pending orders was increased. After the price rose slightly, the current transaction of new orders slowed down. Based on the support of a certain amount of pending orders, the factory temporarily offers tend to strengthen, but inventory pressure still exists. In terms of the market, the trading atmosphere for new orders in the market is general, and there is insufficient promotion. The operators are pessimistic and cautious in pursuing higher prices, and more cautious in terms of emotions. The current market lacks substantial positive support, and short-term price deadlock is the main focus. On the supply side, industry start-ups continue to increase, and corporate inventory pressure is gradually increasing. However, the overall trend of accumulation has slowed down, and the average daily output has temporarily fluctuated within a narrow range. On the demand side, downstream operators have reduced their willingness to follow up. In order to ensure the centralized supply of fertilizer in autumn, compound fertilizer factories have increased the operating rates of individual companies and followed up on the procurement of raw materials. However, some small and medium-sized enterprises have been slow to deliver goods and follow-up is relatively limited. Procurement has not yet ushered in concentrated improvement, and downstream follow-up needs are limited.

On the whole, the current follow-up of new orders in the urea market is slowing down, companies are waiting for support for a short period of time, and demand has not yet been followed up on a large scale. It is expected that the urea market will be dominated by a stalemate in the short period of time and gradually loosen downward.