Daily review of urea: Supply and demand fundamentals continue to be loose, market conditions are struggling to keep up with the rise (October 29)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on October 29 was 1,898.77, a decrease of 3.18 from yesterday, a month-on-month decrease of 0.17% and a year-on-year decrease of 24.67%.

Urea futures market:

Today, the opening price of the Urea UR501 contract is 1831, the highest price is 1839, the lowest price is 1818, the settlement price is 1828, and the closing price is 1824. The closing price is 11% lower than the settlement price of the previous trading day, down 0.60% month-on-month. The fluctuation range of the whole day is 1818-1839; The basis of the 01 contract in Shandong is-24; the 01 contract has reduced its position by 3381 lots today, and so far, it has held 179505 lots.

Today, urea futures prices continued to fluctuate within a narrow range, mainly following the overall market environment and the trend of related varieties. Urea itself still lacks the actual driving force to break the situation. Except for the relatively clear arbitrage operation, both the long and short sides have insufficient confidence in speculative games. Overall, the top of the urea price is still suppressed by excess logic and policies, and the bottom is supported by macro, reserve, cost and other support, until the above logic is falsified, the urea market may remain mainly volatile and waiting.

Spot market analysis:

Today, the price of urea in China has been adjusted slightly. The current factory quotations of companies are at a low level, and the fundamental support in the market is insufficient. Driven by emotion alone, it is difficult for prices to continue to rise. The market is dominated by narrow fluctuations in the short term.

Specifically, prices in Northeast China have stabilized at 1,890 - 1,930 yuan/ton. Prices in East China have been raised to 1,780 - 1,830 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 1,870 - 1,960 yuan/ton. Prices in North China have stabilized at 1,750 - 1,930 yuan/ton. Prices in South China have been lowered to 1,950 - 2,030 yuan/ton. Prices in northwest China have been lowered to 1,880 - 1,890 yuan/ton. Prices in Southwest China have been lowered to 1,870 - 2,250 yuan/ton.

Market outlook forecast:

In terms of factories, the number of shipments is gradually reduced, but the follow-up of new orders is not smooth. Only a few companies undertake short storage tasks. The shipping pressure of manufacturers is gradually increasing. Enterprise inventories have reached a high point throughout the year. The current supply pressure is obvious. Before exports are liberalized, China's high inventory situation is difficult to improve. In terms of the market, market trading performance was tepid, and the market was difficult to improve in the short term. The current shipment of low-priced goods on the market was average, and the market was low and volatile, with mainly narrow fluctuations. On the supply side, the number of companies that repaired problems increased this week. Nissan showed a downward trend, but it was still at a high level. The fundamentals of supply and demand in the market continued to be loose. On the demand side, downstream operators are cautious and wait-and-see, agricultural demand is advancing slowly, and reserve enthusiasm is average; the operating rate of compound fertilizer factories has rebounded slightly, and a small amount of follow-up is limited; industrial demand replenishment remains just in need of procurement, and demand-side support is limited, making it difficult to boost the market atmosphere.

On the whole, China's urea industry is currently facing weak practical problems of high output and high inventories. The fundamentals of market supply and demand continue to be loose. It is expected that the urea market will be low and volatile in a short period of time, and prices will continue to fluctuate steadily and weakly.