August 18 Urea Daily Review: Maintenance and Output-Cut Expectations Lift Sentiment; Urea Futures and Spot Strengthen Together

Domestic Urea Price Index:

According to Feidoodoo data calculations, on August 18, the small-granule urea price index was 1,768.64, up 1.82 from the previous working day, up 0.10% month-on-month, and down 0.77% year-on-year.

Urea Futures Market:

Today, the urea UR2609 contract opened at 1,693, reached a high of 1,730 and a low of 1,693, settled at 1,709, and closed at 1,711. The closing price was +14 compared with the previous trading day’s settlement price, up 0.82% month-on-month. The basis for the 09 contract in Shandong was -1. Today, open interest in the 09 contract changed by -19,074 lots, with current positions at 99,202 lots.

Today, the urea futures market fluctuated within a narrow range in the morning, briefly pulled up in the afternoon and then retreated, overall showing a firm and volatile trend. Recently, planned maintenance at some enterprises has been gradually implemented, and individual large plants have relatively long shutdown cycles. Daily industry output has declined noticeably month-on-month, and the phased supply contraction has provided some support to market sentiment. At the same time, improving export expectations combined with the gradual release of autumn fertilizer demand also provided bottom support to the market. In the spot market, some manufacturers showed strong willingness to support prices, the trading atmosphere improved slightly, and linkage between futures and spot strengthened. However, from a fundamentals perspective, current spot supply remains ample, enterprise inventory pressure has not been effectively relieved, agricultural topdressing demand shows clear regional divergence and lacks concentrated release support, industrial demand is limited to rigid-demand follow-up, compound fertilizer operating loads remain low, and actual spot transactions are weak, which constrains the rebound space of the futures market. The main urea contract is now approaching the delivery month, and the market is in the process of rolling positions to later contracts, with futures movement mainly following spot trends. Overall, today’s urea futures market continued volatile adjustment under the combined influence of “weak reality” and “improved sentiment.” 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 the launch of autumn fertilizer stockpiling.

Spot Market Analysis:

Today, the domestic urea spot market operated on the firm side. Although downstream demand is generally average at present, phased supply contraction and smooth export shipments have provided clear support to the market. In addition, the firm performance of the futures market over the past two days has improved market sentiment, and manufacturers have shown strong willingness to support prices. 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 were stable at 1,680-1,740 yuan/tonne. Prices in Central China rose to 1,700-1,900 yuan/tonne. Prices in North China were stable at 1,570-1,800 yuan/tonne. Prices in South China were stable at 1,790-1,840 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 18: In Guangzhou, Guangdong, reference receiving prices for urea were 1,820-1,830 yuan/tonne, down from the previous working day.

August 18: In Nanning, Guangxi, reference receiving prices for urea were 1,790-1,800 yuan/tonne, unchanged from the previous working day.

August 18: In Shijiazhuang, Hebei, reference receiving prices for urea were 1,740-1,750 yuan/tonne, up 10 yuan/tonne from the previous working day.

August 18: In Wen’an, Hebei, reference receiving prices for urea were 1,730-1,740 yuan/tonne, up 10 yuan/tonne from the previous working day.

August 18: Today, mainstream references for small and medium granules in the Shangqiu market were 1,700-1,710 yuan/tonne, while large granules were referenced at around 1,820-1,830 yuan/tonne.

August 18: 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 1,670-1,700 yuan/tonne, while mainstream large-granule station self-pickup prices were 1,800-1,810 yuan/tonne.

August 18: In Tieling, Liaoning, ex-warehouse/truck pickup prices were referenced at 1,780-1,800 yuan/tonne, unchanged from the previous working day.

August 18: In Heze, Shandong, reference receiving prices for urea were around 1,680-1,690 yuan/tonne, up 10 yuan/tonne from the previous working day.

August 18: In Linyi, Shandong, reference receiving prices for urea were 1,700-1,710 yuan/tonne, up 10 yuan/tonne from the previous working day.

August 18: In the Xianyang market, mainstream price references were 1,800-1,820 yuan/tonne, unchanged from the previous working day.