Daily Review of Urea: The market has returned to supply and demand fundamentals again. The cautious atmosphere in the market is solemn (November 11)

China Urea Price Index:

According to Feiduo data, the urea small pellet price index on November 11 was 1,896.05, a decrease of 6.82 from last Friday, a month-on-month decrease of 0.36% and a year-on-year decrease of 27.41%.

Urea futures market:

Today, the opening price of the Urea UR501 contract is 1820, the highest price is 1823, the lowest price is 1783, the settlement price is 1801, and the closing price is 1792. The closing price is 55% lower than the settlement price of the previous trading day, down 2.98% month-on-month. The fluctuation range throughout the day is 1783-1823; the basis of the 01 contract in Shandong is 18; the 01 contract has increased its position by 16588 lots today, and the position held so far is 179587 lots.

Today, urea futures prices opened sharply lower and downward, mainly because the market temporarily entered a policy vacuum period and the market premium was released after the overall market macro sentiment cooled down. Overall, urea's own fundamentals are still weak, and the general logic and policy suppression of its own supply and weak demand still exist. However, in the short term, the supply side will have a certain marginal easing of reduction expectations in the future, and the demand side will also have a certain reserve expectation. However, after the release of market sentiment today, most of the market premium windows will be closed, and negative feedback issues in the short-term midstream may be the focus of attention.

Spot market analysis:

Today, the price of urea in China is stable and downward, with a small number of new orders following up on the market. The market has once again returned to the fundamentals of strong supply and weak demand. Today's quotation price has been lowered by 10-30 yuan/ton. The overall price adjustment is relatively small. The industry is mainly cautious and wait-and-see, and the market game atmosphere is solemn.

Specifically, prices in Northeast China have stabilized at 1,890 - 1,930 yuan/ton. Prices in East China have stabilized at 1,800 - 1,850 yuan/ton. The price of small and medium-sized particles in Central China has stabilized at 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 1,950 -2020 yuan/ton. Prices in the northwest region are stable at 1,900 - 1,920 yuan/ton. Prices in Southwest China are stable at 1,860 - 2,150 yuan/ton.

Market outlook forecast:

In terms of factories, the number of follow-up new orders is limited, and the pressure on manufacturers to ship still exists. At present, some companies 'offers are slightly loosened downward. The overall market price is stable and the price adjustment range is limited, and the mentality is cautious. In terms of the market, the market has returned to a downturn, the market is basically stable, and the overall transaction activity is average. The current fundamentals of supply and demand have not changed significantly. Companies continue to wait and see, there is a lack of favorable support for the upward price. Companies are under pressure to adjust prices, and the market is dominated by weak shocks in a short period of time. In terms of supply, the current Nissan continues to remain at around 180,000 tons, and the industry's supply is still sufficient. This week, a new production capacity of a company in Hubei is about to be launched. The market's spot supply continues to be abundant, and the supply side continues to be negative. On the demand side, the demand side has increased slowly. Downstream just needs to get the right amount of goods. The follow-up sentiment continues to be sluggish. The mentality of receiving goods is cautious. There is no sign of improvement in the short term. Current export profits are still low. China's goods are difficult to export, and short-term goods exports are limited.

On the whole, the current supply and demand fundamentals of China's urea market continue to be relaxed and develop, and the follow-up of new orders on the market is limited. It is expected that the urea market will be dominated by shocks in a short period of time, with low prices and stalemate.