Daily Review of Urea: Supply and demand fundamentals continue to be loose and lack of obvious positive guidance in the field (November 5)

China Urea Price Index:

According to calculations from Feiduo data, the urea small pellet price index on November 5 was 1,896.95, an increase of 2.27 from yesterday, a month-on-month increase of 0.12% and a year-on-year decrease of 26.80%.

Urea futures market:

Today, the opening price of the Urea UR501 contract: 1850, the highest price: 1865, the lowest price: 1835, the settlement price: 1851, the closing price: 1864. The closing price increased by 30 compared with the settlement price of the previous trading day, up 1.64% month-on-month, and the fluctuation range throughout the day is 1835-1865; The basis of the 01 contract in Shandong is-64; the 01 contract has increased its position by 2526 lots today, and has held 178441 lots so far.

Today, urea futures prices continued to be strong and slightly rebounded, mainly due to macro sentiment and related varieties. At present, the fundamentals of urea itself are still weak, but the overall futures price is strong. Due to the expected support of macro policies and industry meetings, futures prices continue to bear the demand for current arbitrage while they are rising. Speculative demand has alleviated the pressure on manufacturers 'inventories to a certain extent, making upstream manufacturers have a certain willingness to bid to compete for the further release of reserve demand, which in turn has formed a certain positive support for futures prices. In the short term, the model will still be able to flow continuously until macro and meeting expectations are falsified, but the contradiction between supply and demand has not been resolved but has been postponed. We need to beware of negative feedback problems from midstream selling pressure after subsequent expectations are implemented.

Spot market analysis:

Today, the price of urea in China's market increased steadily and moderately. The market fluctuated and consolidated. The transaction situation of some low-end quoted goods improved, but the sustainability was weak. Enterprise prices remained firm, and some increased slightly.

Specifically, prices in Northeast China have stabilized at 1,890 - 1,930 yuan/ton. Prices in East China have stabilized at 1,790 - 1,830 yuan/ton. The price of small and medium-sized particles in Central China has been raised to 1,790 - 2,000 yuan/ton, and the price of large particles has stabilized at 1,860 - 1,940 yuan/ton. Prices in North China have stabilized at 1,750 - 1,930 yuan/ton. Prices in South China are stable at 1,950 - 2,030 yuan/ton. Prices in the northwest region are stable at 1,880 - 1,890 yuan/ton. Prices in Southwest China are stable at 1,860 - 2,250 yuan/ton.

Market outlook forecast:

In terms of factories, market sentiment has improved slightly. Some manufacturers have increased new orders for low-end goods, and the advance orders of enterprises have improved slightly. However, overall inventories have remained high and rising, and the pressure of de-warehousing continues to accompany them. In terms of the market, driven by the strong market performance yesterday and the emotional impact of low market prices, transactions of some low-end goods in the mainstream region improved slightly. However, the market fundamentals have not changed significantly. The market continues to be weak and consolidated, and the market is deadlocked and fluctuated. The main thing is waiting for new obvious good news to guide. In terms of supply, the recent maintenance of some equipment has alleviated the pressure brought by the supply side to a certain extent. In the future, the number of equipment for maintenance will gradually increase, mainly at the end of this month and next month. At present, the supply side is still sufficient, and the fundamentals of supply and demand are loose. On the demand side, follow-up efforts on the demand side are limited, enthusiasm for agricultural reserves is limited, and the mentality is cautious and follow-up is limited; most of the demand purchases of downstream compound fertilizers and other short storage enterprises are mainly based on dips and appropriate purchases, and the support on the demand side is insufficient. The loose fundamentals are difficult to change.

On the whole, although some low-end urea transactions in China have improved, the market still lacks obvious positive support. The positive driving force on the market is not obvious. It is difficult to maintain demand on dips for a long time. It is normal to continue to be low in sentiment. It is expected that urea market prices will continue to be stable and narrow in the short term.