August 6 Urea Daily Review: Price-Stabilization Signals Boost Market Sentiment, Loose Supply-Demand Pattern Limits Rebound Height

Domestic Urea Price Index:

According to Feidoodoo data, on August 6, the small-granular urea price index was 1,803.64, up 5.91 from the previous working day, up 0.33% month on month, and down 0.36% year on year.

Urea Futures Market:

Today, the urea UR2609 contract opened at 1,728, reached a high of 1,734 and a low of 1,709, settled at 1,720, and closed at 1,716. The closing price was down 5 from the previous trading day's settlement price, a decline of 0.29%. The basis for the 09 contract in Shandong was +14. Open interest in the 09 contract increased by -17,490 lots today, with total open interest currently at 213,593 lots.

The urea futures market pulled back today and generally moved within a narrow range. Supported by price-stabilization policy signals and expectations for India's urea tender, board sentiment remained relatively firm. But as speculative enthusiasm was gradually released, market heat cooled and the market focus returned to fundamentals. At the same time, the nearby contract is approaching delivery, funds have limited willingness to go long, and trading room is constrained. The subsequent trend still needs confirmation from signs of improvement in the spot market. Fundamentally, industry operating rates on the supply side remain high, market supply is ample, producer inventory pressure persists, and the loose supply pattern has not changed materially. On the demand side, agricultural top-dressing demand is regionally divided and has not formed concentrated purchasing support. In the industrial sector, downstream compound fertilizer, melamine, and other users maintain an essential-purchase model, buyers remain cautious, and spot transactions lack continuity. Overall, domestic spot supply-demand contradictions are unlikely to ease quickly in the short term. After sentiment is fully digested, attention should focus on whether policy support can effectively transmit to spot fundamentals. Short-term futures prices are expected to mainly fluctuate and consolidate. Later, close attention should be paid to India's tender results, the start of autumn fertilizer stockbuilding, raw material cost fluctuations, and policy developments.

Spot Market Analysis:

China's domestic urea spot market ran stable to firm today. Supported by price-stabilization policy signals, spot trading sentiment improved, new orders at producers increased, and some companies raised ex-works offers slightly with support from pending orders. But fundamentally, the current supply-demand contradiction remains. On the supply side, industry operating rates stay high, market supply is ample, and producer inventory pressure continues. On the demand side, agricultural top-dressing demand varies by region and has not formed concentrated purchasing support, making it difficult to effectively push prices higher. In the industrial sector, demand is limited to essential follow-up purchases, downstream buyers remain cautious, and overall transactions are limited. Overall, domestic spot supply-demand contradictions are unlikely to improve immediately in the short term. After sentiment is fully digested, the key question will be whether policy support can actually transmit to spot fundamentals. The spot market is expected to continue running with a firm bias in the short term. Further attention should be paid to India's tender results and the start of autumn fertilizer stockbuilding.

Overall, the domestic urea spot market is currently stable to firm. On the supply side, industry operating rates remain high, market supply is ample, overall supply pressure remains, and producer inventory pressure continues to accumulate. On the demand side, agricultural top-dressing demand varies by region and has not yet formed concentrated purchasing support. In the industrial sector, demand is limited to essential follow-up purchases, downstream buyers remain cautious, and overall transactions are limited. In terms of inventories, pending producer orders provide some support to offers, but overall inventory pressure has not been materially relieved. Price-stabilization policy signals have improved trading sentiment and increased new orders. Later, attention should focus on the realization of India's tender results and the impact of the autumn fertilizer stockbuilding schedule.

By region, prices in Northeast China were stable at RMB 1,830-1,860/tonne. Prices in East China rose to RMB 1,710-1,780/tonne. Prices in Central China rose to RMB 1,740-1,900/tonne. Prices in North China rose to RMB 1,610-1,860/tonne. Prices in South China rose to RMB 1,830-1,870/tonne. Prices in Northwest China were stable at RMB 1,860-1,910/tonne. Prices in Southwest China were stable at RMB 1,680-2,080/tonne.

Market Updates:

August 6: In Guangzhou, Guangdong, the reference receiving price for urea was RMB 1,860-1,870/tonne, up from the previous working day.

August 6: In Nanning, Guangxi, the reference receiving price for urea was RMB 1,830-1,840/tonne, up from the previous working day.

August 6: In Shijiazhuang, Hebei, the reference receiving price for urea was RMB 1,750-1,780/tonne, up RMB 20/tonne from the previous working day.

August 6: In Wen'an, Hebei, the reference receiving price for urea was RMB 1,730-1,760/tonne, up RMB 20/tonne from the previous working day.

August 6: In Shangqiu today, the mainstream reference price for small and medium granules was RMB 1,740-1,750/tonne, while large granules were around RMB 1,820-1,830/tonne.

August 6: In Jingmen today, the mainstream reference price for small and medium granules was RMB 1,740-1,750/tonne, station self-pickup was temporarily around RMB 1,700-1,710/tonne, and mainstream large-granule station self-pickup was RMB 1,800-1,810/tonne.

August 6: In Tieling, Liaoning, ex-warehouse/truck pickup prices were referenced at RMB 1,840-1,860/tonne, unchanged from the previous working day.

August 6: In Heze, Shandong, the reference receiving price for urea was around RMB 1,710-1,720/tonne, up RMB 10/tonne from the previous working day.

August 6: In Linyi, Shandong, the reference receiving price for urea was RMB 1,730-1,740/tonne, up RMB 10/tonne from the previous working day.

August 6: In Xianyang, the mainstream reference price was RMB 1,840-1,860/tonne, unchanged from the previous working day.