August 13 Urea Daily Review: Loose Supply-Demand Pattern Continues, Market Fluctuates with a Weak Bias

Domestic Urea Price Index:

According to Feidoodoo data calculations, on August 13, the small-granule urea price index was 1781.82, down 5.91 from the previous working day, or -0.33% month on month, and down 0.03% year on year.

Urea Futures Market:

Today, the urea UR2609 contract opened at 1680, reached a high of 1685 and a low of 1660, settled at 1672, and closed at 1678. The closing price was down 14 from the previous trading day’s settlement price, or -0.83%. The Shandong basis for the 09 contract was +12. Open interest in the 09 contract increased by -13428 lots today, with current positions at 128329 lots.

The urea futures board moved in narrow weak fluctuations today, and the core supply-demand contradiction suppressing the market has not yet shown signs of reversal. On the supply side, industry plant loads remain high, daily output is at a relatively high level for the same period historically, and new capacity is being released successively, leaving overall market supply abundant. On the demand side, seasonal weakness is evident. Agricultural topdressing demand is basically ending, operating rates of industrial downstream sectors such as compound fertilizer and melamine remain low, and downstream enterprises mainly restock according to rigid demand with cautious buying sentiment. New spot orders were generally flat, only low-priced cargoes traded relatively smoothly, and downstream acceptance of high-priced cargoes remained limited. Enterprise inventories continued to accumulate this week, and the loose supply-demand pattern is difficult to reverse substantively in the short term. Policy-side and export news provided some bottom support to the board. The implementation of the second batch of export quotas and India’s new tender both brought marginal positive expectations, but constrained by weak international urea prices and shipment pace, actual export increments are relatively limited and have not effectively relieved domestic inventory pressure. Overall, short-term loose supply-demand contradictions in urea are difficult to ease quickly, and policy transmission will still take time. Futures prices are expected to maintain weak fluctuations. Follow-up attention should focus on exports, the pace of autumn fertilizer preparation, and policy implementation.

Spot Market Analysis:

The domestic urea spot market continued to show a stalemated and weak pattern today. Yesterday, some enterprises with low-end quotations saw acceptable new order transactions. Today, supported by pending orders, they slightly raised ex-factory quotations. However, market wait-and-see sentiment remained strong, downstream follow-up was weak, and acceptance of high-priced cargoes was limited. Fundamental supply-demand contradictions have not eased. On the supply side, industry operating rates remain high, supply is sufficient, enterprise inventories continued to accumulate slightly this week, and inventory pressure persists. On the demand side, agricultural topdressing demand is regionally differentiated and has not formed concentrated procurement support. In the industrial sector, only rigid-demand procurement continues, compound fertilizer operating rates remain low, procurement strength is average, export policy has not been adjusted, downstream buyers are cautious, and overall transactions are limited. Overall, short-term domestic spot supply-demand contradictions are difficult to improve significantly. Follow-up attention should focus on whether policy-side positives can be released and transmitted to the spot market. The spot market is expected to maintain weak fluctuations in the short term, with focus on India’s tender result and the start pace of autumn fertilizer preparation.

Overall, the domestic urea spot market currently maintains weak fluctuations. On the supply side, industry operating rates remain high, market supply is sufficient, overall supply pressure remains, and enterprise inventory pressure continues to accumulate. On the demand side, agricultural topdressing demand is regionally differentiated and has not yet formed concentrated procurement support. The industrial sector only maintains rigid-demand follow-up, downstream buying attitudes are cautious, and overall transactions are limited. On inventories, overall inventory pressure has not been substantively relieved and continues to weigh on upstream quotation sentiment. Recently, policy-side price-stabilization signals have been released, showing a clear attitude toward supporting the market bottom, but fundamentals still cannot provide further upward momentum. Follow-up attention should focus on the fulfillment of India’s tender result and the impact of the autumn fertilizer preparation schedule.

Specifically, prices in Northeast China remained stable at 1790-1820 yuan/tonne. Prices in East China fell to 1680-1740 yuan/tonne. Prices in Central China fell to 1690-1900 yuan/tonne. Prices in North China remained stable at 1570-1810 yuan/tonne. Prices in South China remained stable at 1810-1850 yuan/tonne. Prices in Northwest China remained stable at 1860-1910 yuan/tonne. Prices in Southwest China fell to 1680-2000 yuan/tonne.

Market Updates:

August 13: In Guangzhou, Guangdong, the reference receiving price for urea was 1840-1850 yuan/tonne, unchanged from the previous working day.

August 13: In Nanning, Guangxi, the reference receiving price for urea was 1810-1830 yuan/tonne, unchanged from the previous working day.

August 13: In Shijiazhuang, Hebei, the reference receiving price for urea was 1720-1740 yuan/tonne, basically unchanged from the previous working day.

August 13: In Wen’an, Hebei, the reference receiving price for urea was 1700-1730 yuan/tonne, basically unchanged from the previous working day.

August 13: In Shangqiu today, mainstream reference prices for small and medium granules were 1700-1720 yuan/tonne, while large granules were around 1820-1830 yuan/tonne.

August 13: In Jingmen today, mainstream reference prices for small and medium granules were 1730-1740 yuan/tonne, station self-pickup prices were temporarily around 1700-1710 yuan/tonne, and mainstream station self-pickup prices for large granules were 1800-1810 yuan/tonne.

August 13: In Tieling, Liaoning, ex-warehouse/truck pickup reference prices were 1800-1820 yuan/tonne, unchanged from the previous working day.

August 12: In Heze, Shandong, the reference receiving price for urea was around 1680-1690 yuan/tonne, basically unchanged from the previous working day.

August 13: In Linyi, Shandong, the reference receiving price for urea was 1690 yuan/tonne, basically unchanged from the previous working day.

August 13: In Xianyang, mainstream reference prices were 1800-1820 yuan/tonne, unchanged from the previous working day.