Daily Review of Urea: Companies are ready to go and high inventories today's quotations are temporarily consolidated (October 24)

China Urea Price Index:

According to calculations from Feiduo data, the urea small pellet price index on October 24 was 1,904.23, an increase of 1.36 from yesterday, a month-on-month increase of 0.07% and a year-on-year decrease of 24.24%.

Urea futures market:

Today, the opening price of the Urea UR501 contract: 1842, the highest price: 1852, the lowest price: 1825, the settlement price: 1836, the closing price: 1838, the closing price increased by 66 compared with the settlement price of the previous trading day, up 0.33% month-on-month, and the fluctuation range throughout the day is 1825-1852; the basis of the 01 contract in Shandong-28; the 01 contract has increased its position by 725 lots today, and has held 176397 lots so far.

Today, urea futures prices remained mainly volatile in a narrow range, and intraday trends mostly fluctuated with the overall market environment. At present, there is no major change in the fundamentals of urea itself, and price fluctuations lack actual drivers. In the short term, urea is suppressed by continued supply growth at the top, and there is also expected support from costs and reserve demand at the bottom. This is compounded by important meetings in China near the end of the month. The macro atmosphere of the meeting may be on the rise, and it will remain volatile for the time being and wait for new drivers to emerge.

Spot market analysis:

Today, the price of urea in China remained stable. After two consecutive days of price increases, the number of new orders in the factory increased, causing the focus of on-site negotiations to rise slightly. With both orders and inventories high, there was insufficient motivation to continue to increase the quotation. Today, on-site trading activity was low, and the quotation was large and small.

Specifically, prices in Northeast China have stabilized at 1,890 - 1,930 yuan/ton. Prices in East China have stabilized at 1,790 - 1,840 yuan/ton. The price of small and medium-sized particles in Central China has stabilized at 1,800 - 2,000 yuan/ton, and the price of large particles has stabilized at 1,880 - 1,960 yuan/ton. Prices in North China have stabilized at 1,780 - 1,930 yuan/ton. Prices in South China have been raised to 1960-2020 yuan/ton. Prices in the northwest region are stable at 1,900 - 1,920 yuan/ton. Prices in Southwest China are stable at 1,900 - 2,250 yuan/ton.

Market outlook forecast:

In terms of factories, after the increase in low-end quotation orders in recent days, manufacturers 'quotations have increased tentatively and are currently waiting to accumulate. In the continuous shipment, although orders have increased, due to the small flow, the company's shipping pressure still exists, and the inventory continues to remain high, and the shipment situation in the main production and marketing area is average. In terms of the market, most players just need to follow up and cover positions. Trading sentiment on the floor is still cautious and transactions are flexible. Most new orders just need small orders to be traded. The market is consolidating and stable, and there is no significant fluctuation in market prices. On the supply side, corporate inventories and Nissan are still at a relatively high level, with Nissan remaining fluctuating around 190,000 tons. There is a limit to the upward boost in prices. Before exports are liberalized, it is difficult to improve the industry's high inventory situation. On the demand side, after the factory's new monotonous rise, the downstream willingness to receive goods is low, and the chasing sentiment is not high. The demand for replenishment has weakened. Purchase on bargains has been maintained. The mentality is mostly cautious and wait-and-see, resulting in average trading of new orders on the market. Currently, there is a small amount of agricultural stocks. There is a replenishment gap and follow-up is limited. The operating rate of the compound fertilizer factory has rebounded slightly, and a small amount of replenishment is replenished.

On the whole, the current urea market in China is facing a weak reality of high output and high inventory. Under the pattern of strong supply and weak demand, the market still lacks motivation to rise, and the positive results are ambiguous. It is expected that the urea market price will be weak and consolidating in a short period of time.