Daily review of urea: The floor price has improved and the inventory is still difficult to change (November 6)

China Urea Price Index:

According to calculations from Feiduo data, the urea small pellet price index on November 6 was 1,903.32, an increase of 6.36 from yesterday, a month-on-month increase of 0.34% and a year-on-year decrease of 27.35%.

Urea futures market:

Today, the opening price of the Urea UR501 contract is 1855, the highest price is 1870, the lowest price is 1818, the settlement price is 1844, and the closing price is 1823. The closing price is 28 lower than the settlement price of the previous trading day, down 1.51% month-on-month. The fluctuation range of the whole day is 1818-1870; The basis of the 01 contract in Shandong-3; the 01 contract has reduced its position by 7084 lots today, and so far, it has held 171357 lots.

Today's high urea futures prices dropped significantly. On the one hand, the overall market sentiment has weakened today, with the market giving priority to the negative points of export suppression that may be caused by Trump's victory in the U.S. election. On the other hand, the fundamentals of urea itself are still weak, and this week's on-site inventories have also expanded despite the month-on-month increase in orders from companies, resulting in a weakening of market sentiment. In the short term, the fundamental suppression of urea itself still exists, but the market for responding policies after subsequent important meetings in China still has certain expectations and supporting effects. Before that, it may still be dominated by the wide fluctuations in the market environment.

Spot market analysis:

Today, the price of urea in China fluctuated upward. On the basis of positive corporate transactions in the past two days, manufacturers raised their quotations by 10-20 yuan/ton today, and the atmosphere in the venue has slightly improved compared with the previous period.

Specifically, prices in Northeast China have stabilized at 1,890 - 1,930 yuan/ton. Prices in East China have been raised to 1,800 - 1,850 yuan/ton. The price of small and medium-sized particles in Central China has been raised to 1,820 - 1,960 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 have been raised to 1,980 - 2,040 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, manufacturers in mainstream regions have low quotations. Currently, due to the emotional boost, transactions in low-end supply sources in mainstream regions have improved one after another, and most quotations have increased. However, the shipping pressure from manufacturers still exists and is difficult to fundamentally alleviate. In terms of the market, the fundamentals of the urea market have not changed much. Low-end transactions of some companies in mainstream regions have increased, and the market has passively followed up. Based on the boost from emotions, the focus of market transactions has increased slightly, and on-site transaction activity has increased. On the supply side, some equipment in the industry have been repaired recently, and the industry's supply side has declined slightly. However, the current supply side performance is still sufficient, and the fundamentals of supply and demand continue to be loose. On the demand side, the market demand is temporarily unchanged. Driven by the low-price atmosphere in recent days, downstream companies have followed suit to buy in an appropriate amount. Agricultural reserves are generally enthusiastic and just need to get goods properly; the operating rate of compound fertilizer factories rebounded slightly, and the impact on raw material procurement is limited; Entering the winter fertilizer reserve stage, melamine profits restrict the increase in output and limited fertilizer purchase.

On the whole, the current low-price transaction situation in China's urea market has improved, companies have moved slightly, overall demand follow-up is limited, and inventories continue to be high. With weak fundamentals, the expected positive results have not yet appeared. It is expected that urea market prices will continue to be stable and volatile in a short period of time, with a small price adjustment.