Daily Review of Urea: The pace of low-price refills in the field has slowed down, and the market has returned to fundamentals again (November 7)

China Urea Price Index:

According to calculations from Feiduo data, the urea small pellet price index on November 7 was 1,902.86, a decrease of 0.45 from yesterday, a month-on-month decrease of 0.02% and a year-on-year decrease of 27.50%.

Urea futures market:

Today, the opening price of the urea UR501 contract is 1830, the highest price is 1847, the lowest price is 1824, the settlement price is 1836, and the closing price is 1838. The closing price is 6 lower than the settlement price of the previous trading day, down 0.33% month-on-month, and the fluctuation range throughout the day is 1824-1847; The basis of the 01 contract in Shandong is-18; the 01 contract has reduced its position by 3730 lots today, and so far, it has held 167627 lots.

Today, urea futures prices rebounded mainly in a narrow range. Today, the overall market has diverged, and small essays on the incremental fiscal scale have once again flowed out. However, expectations for the repair of the commodity market have led to a slight weakening of performance. The market may be worried about the benefits after the implementation of policy expectations. However, the fundamental logic of urea itself has not changed significantly, and the premium structure has not fallen below. The story of bottom support can continue to be told, focusing in the short term on how the market will respond after tomorrow's important meeting.

Spot market analysis:

Today, the overall price of urea in China is stable, with some small ranges adjusted. After a round of low-price orders, the pace of follow-up by the industry has slowed down. Companies 'quotations are mainly stable and pay more attention to the trend of the market. The market operation is clearly deadlocked. Today's quotations are stable and fluctuate in small ranges.

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 lowered 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 lowered to 1,980 - 2,040 yuan/ton. Prices in Northwest China have been raised to 1,900 - 1,920 yuan/ton. Prices in Southwest China have been lowered to 1,860 - 2,150 yuan/ton.

Market outlook forecast:

In terms of factories, new orders from manufacturers have gradually increased recently. After factory orders have improved, they have gradually accumulated. Many company quotations have been raised, and prices have been stabilized. As the pace of purchasing gradually slows down, companies continue to receive orders and reduce their sales, sales continue to be under pressure, and corporate inventories continue to increase this week. In terms of the market, the long and short market trend is not yet clear. After the increase, the number of new orders decreased, the downstream follow-up efforts were significantly weakened, and the pace of on-site transactions gradually slowed down. Most players maintained a small number of follow-up, and the market fluctuated within a narrow range. In terms of supply, with the continuous maintenance of some units this week, the industry's supply level dropped slightly, but inventory and Nissan are still at a relatively high level. Most of the parking by gas companies is concentrated in the middle to late this month to next month. The specific parking time still needs to be flexibly adjusted according to the natural gas supply situation. On the demand side, after a round of low-priced buying on the demand side, new orders continued to be traded and on-site trading activity was once again suppressed. Downstream follow-up efforts slowed down, and the mentality of operators was more cautious.

Overall, the current negative fundamentals of China's urea market are still dominant, and this week's round of low-priced orders has basically ended. It is expected that the urea market price will be stable and gradually consolidate downward in a short period of time.