Daily review of urea: Market prices have reached low levels and follow-up on new orders is still poor (September 5)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on September 5 was 2,032.27, a decrease of 10.91 from yesterday, a month-on-month decrease of 0.53% and a year-on-year decrease of 22.29%.

Urea futures market:

Today, the opening price of the Urea UR501 contract is 1826, the highest price is 1835, the lowest price is 1814, the settlement price is 1822, and the closing price is 1821. The closing price is 10% lower than the settlement price of the previous trading day, down 0.55% month-on-month. The fluctuation range of the whole day is 1814-1835; the basis of the 01 contract in Shandong is 119; the 01 contract has reduced its position by 2039 lots today, and so far, the position is 191675 lots.

Today, urea futures prices continued to fluctuate mainly downward. Recently, the logic of the urea market still revolves around its own fundamentals of strong supply and weak demand. The loose supply and demand pattern not only suppresses price elasticity but also suppresses the enthusiasm of downstream procurement. Coupled with China's supply guarantee policy, it is difficult to open an external demand window. The short-term market still lacks actual driving force, and futures prices may still decline mainly with the market environment shocks.

Spot market analysis:

Today, China's urea market priceContinuing the weak downward trend, although the current price has dropped to a previous low, given the insufficient buying gas at downstream terminals, factory shipment pressure is gradually emerging, and market prices continue to decline to attract orders.。

Specifically, prices in Northeast China are stable at 2,040 - 2,070 yuan/ton. Prices in East China have been lowered to 1,930 - 1,980 yuan/ton. The price of small and medium-sized particles in Central China has been lowered to 1,930 - 2,150 yuan/ton, and the price of large particles has stabilized at 2,050 - 2,120 yuan/ton. Prices in North China have been lowered to 1,860 - 2,070 yuan/ton. Prices in South China have been lowered to 2,050 - 2,120 yuan/ton. Prices in Northwest China have been lowered to 1990-2040 yuan/ton. Prices in Southwest China have been lowered to 2,000 - 2,350 yuan/ton.

Market outlook forecast:

In terms of factories, the current factory quotations of factories in mainstream regions have dropped to low prices in the previous period, but the situation of acquiring new orders is average. Companies 'shipments are under pressure, and the quotations continue to be lowered, attracting new orders to follow up. On the market side, after the price cut, the market transaction atmosphere remained average, and the market fell into a deadlock. Operators waited for a new round of low prices to appear, and downstream low prices followed up, once again boosting the trading atmosphere on the floor. In terms of supply, based on the continuous resumption of early equipment maintenance, the current industry's daily output has stabilized at more than 180,000 tons. In addition, the recent recovery of equipment in Inner Mongolia and Northeast China is still expected. The supply pressure in the industry is gradually increasing, and corporate inventories are showing a trend of accumulation. On the demand side, downstream follow-up is still cautious, and agricultural fertilizer preparation is less enthusiastic, mostly due to reserve demand; the industry is mainly in demand, and it still maintains a cautious wait-and-see attitude towards current prices, and the overall demand support is weak.

On the whole, the current urea market supply is gradually easing, while demand support is poor. Guided by the lack of obvious positive information on the market, it is expected that the urea market price will continue to operate at a low level in the short term.