August 19 Urea Daily Review: Futures and Spot Sentiment Resonate; Urea Market to Remain Firm in the Short Term

Domestic Urea Price Index:

According to Feidoodoo data calculations, on August 19, the small-granule urea price index was 1,770.00, up 1.36 from the previous working day, up 0.08% month-on-month, and down 0.69% year-on-year.

Urea Futures Market:

Today, the urea UR2701 contract opened at 1,736, reached a high of 1,752 and a low of 1,736, settled at 1,745, and closed at 1,742. The closing price was +8 compared with the previous trading day’s settlement price, up 0.46% month-on-month. The basis for the 01 contract in Shandong was -32. Today, open interest in the 01 contract increased by 22,025 lots, with current positions at 217,266 lots.

Today, the urea futures market fluctuated on the firm side, with strong linkage between futures prices and spot sentiment. On the spot side, some producers showed clear willingness to support prices, and trading sentiment in the market improved slightly. On the supply side, expectations of plant maintenance and diversion of goods to exports brought phased bullish support, but weak domestic demand fundamentals limited upside space. Looking at the overall supply-demand pattern, domestic spot supply remains ample, and enterprise inventory pressure has not been substantially resolved. Although factory inventories declined slightly this week, the overall inventory level remains relatively high. Demand is clearly divided: agricultural topdressing demand only shows sporadic local procurement and has not formed concentrated volume support; industrial downstream buyers maintain a rigid-demand procurement pace; compound fertilizer enterprises operate at low loads; and actual spot transactions remain weak, further limiting the rebound height of the futures market. Overall, urea futures are expected to maintain a volatile adjustment pattern amid the contest between weak current fundamentals and recovery expectations. Follow-up attention should focus on the implementation progress of maintenance-related output reductions, export order fulfillment, and marginal demand improvement signals from the start of autumn fertilizer stockpiling.

Spot Market Analysis:

Today, the domestic urea spot market operated stable to firm. Although downstream demand is generally average, the current spot urea market is driven more by expectations. Producers have a strong willingness to support prices, while traders mainly remain on the sidelines and lag in following price increases. However, the fundamental supply-demand contradiction has not yet eased. On the supply side, the industry operating rate remains high year-on-year, supply is ample, and inventory pressure continues. On the demand side, agricultural topdressing demand is regionally divergent and has not formed concentrated procurement support. Industrial sectors only maintain rigid-demand procurement, compound fertilizer operating rates remain low, procurement strength is average, downstream buyers are cautious in receiving goods, and overall transactions are limited. Overall, downstream demand is unlikely to improve significantly, but some enterprises in mainstream regions will enter maintenance in late August, export shipments are still ongoing, and some enterprises have begun or plan to implement output reductions. Under the combined influence of these factors, whether the market has entered a bottom range remains to be observed. The market is expected to maintain a firm and volatile trend in the short term. Follow-up attention should focus on the actual implementation of supply-side output reductions and changes in policy and news factors.

Overall, the domestic urea spot market currently maintains a firm and volatile trend. On the supply side, the industry operating rate remains high, market supply is ample, and inventory pressure continues to accumulate. However, some enterprises plan equipment maintenance and output reductions in late August, while export shipments remain smooth, providing marginal support to spot prices. Strength in the futures market has also boosted manufacturers’ price-support sentiment. On the demand side, agricultural topdressing demand is regionally divergent and has not yet formed concentrated procurement support. Industrial sectors only maintain rigid-demand follow-up, compound fertilizer operating rates remain low, downstream buyers are cautious, and overall transaction volume is limited. The core contradiction of loose supply and demand fundamentals has not yet been substantially reversed, and upward drivers are mainly coming from expectations of supply reduction and export diversion. Follow-up attention should focus on the implementation of equipment maintenance and output reductions, the pace of export order fulfillment, and marginal changes brought by autumn fertilizer stockpiling.

Specifically, prices in Northeast China were stable at 1,790-1,820 yuan/tonne. Prices in East China rose to 1,690-1,740 yuan/tonne. Prices in Central China rose to 1,710-1,900 yuan/tonne. Prices in North China were stable at 1,570-1,800 yuan/tonne. Prices in South China fell to 1,790-1,830 yuan/tonne. Prices in Northwest China were stable at 1,860-1,910 yuan/tonne. Prices in Southwest China were stable at 1,680-2,000 yuan/tonne.

Market Updates:

August 19: In Guangzhou, Guangdong, reference receiving prices for urea were 1,820-1,830 yuan/tonne, unchanged from the previous working day.

August 19: In Nanning, Guangxi, reference receiving prices for urea were 1,790-1,800 yuan/tonne, unchanged from the previous working day.

August 19: In Shijiazhuang, Hebei, reference receiving prices for urea were 1,740-1,750 yuan/tonne, basically unchanged from the previous working day.

August 19: In Wen’an, Hebei, reference receiving prices for urea were 1,730-1,740 yuan/tonne, basically unchanged from the previous working day.

August 19: Today, mainstream references for small and medium granules in the Shangqiu market were 1,710-1,730 yuan/tonne, while large granules were referenced at around 1,820-1,830 yuan/tonne.

August 19: Today, mainstream references for small and medium granules in the Jingmen market were 1,710-1,730 yuan/tonne. Station self-pickup was temporarily referenced at around 1,680-1,700 yuan/tonne, while mainstream large-granule station self-pickup prices were 1,800-1,810 yuan/tonne.

August 19: In Tieling, Liaoning, ex-warehouse/truck pickup prices were referenced at 1,780-1,800 yuan/tonne, unchanged from the previous working day.

August 19: In Heze, Shandong, reference receiving prices for urea were around 1,690-1,700 yuan/tonne, basically unchanged from the previous working day.

August 19: In Linyi, Shandong, reference receiving prices for urea were 1,710-1,720 yuan/tonne, basically unchanged from the previous working day.

August 19: In the Xianyang market, mainstream price references were 1,800-1,820 yuan/tonne, unchanged from the previous working day.