September 14 Urea Daily Review: Export Rumors Disturb Market Sentiment, Urea Market Consolidates Narrowly

Domestic Urea Price Index:

According to FDD data, on September 14, China's small-particle urea price index was 1,801.36, down 0.45 from the previous working day, down 0.03% period-over-period and up 4.76% year-on-year.

Urea Futures Market:

Today, the urea UR2701 contract opened at 1,802, with a high of 1,818, a low of 1,795, a settlement price of 1,806, and a close of 1,799. The close was +4 from the previous trading day's settlement, up 0.22%; the January contract's Shandong basis was -19. The January contract added 1,569 lots today, with open interest now at 251,938 lots.

Today's urea futures market initially rose and then pulled back into narrow fluctuation. In early trading, weekend rumors of a third batch of export quotas boosted sentiment, improved transactions in some physical markets, and lifted prices; market sentiment briefly warmed and futures edged up. But as trading refocused on domestic supply-demand fundamentals, gains were gradually given back and the market turned cautious and wait-and-see. Export quota news had already been partly priced in, actual shipment realization remains delayed, and in the short term it affects sentiment more than immediate supply and demand. Domestic demand activity remains low; agriculture is in an off-season, compound-fertilizer and industrial users are mostly replenishing on dips and as needed, and although producers are willing to support prices, downstream buyers are cautious about chasing gains, so transaction follow-through is limited. On the cost side, coal and natural gas prices are firm, providing some floor support for urea prices, but weak domestic demand still limits upside. Overall, urea futures lack a clear directional driver in the short term, swinging repeatedly between export-sentiment disruption and weak fundamentals, and are expected to remain in small, rangebound consolidation. Attention should be paid to actual implementation of export quotas, improvement in physical transactions, and the start of autumn fertilizer demand.

Spot Market Analysis:

Today the domestic urea spot market consolidated narrowly. Over the weekend, prices in many regions eased slightly, but low-end transactions improved at regional plants, and producers in Shandong and other areas raised quotations on a trial basis. However, domestic demand activity remains low; downstream buyers are mainly buying on dips and cautious about chasing higher prices. Market rumors that a third batch of export quotas may be issued, with a larger scale than previously expected, gave sentiment a slight boost, but actual realization remains delayed and attention should be paid to news disruption. From a supply-demand perspective, supply remains relatively ample. Last week's destocking has already been reflected in prices, downstream purchasing pace slowed after higher prices, agricultural demand is in an intermittent period, industrial users are maintaining low inventory strategies, actual consumption capacity is limited, and the market lacks strong demand-side traction. Overall, supply-demand competition continues in the short term, and the market is expected to continue rangebound consolidation. The direction still depends on later demand activation and whether news is confirmed.

Overall, the current domestic urea spot market is oscillating. On the supply side, industry operating loads remain high and supply is generally ample; enterprise inventory digestion has accelerated but sustainability remains to be assessed. Daily output has fallen marginally from high levels because of concentrated plant maintenance, and port shipments have diverted some domestic cargoes, easing supply pressure to some extent. On the demand side, compound-fertilizer and downstream industrial users are constrained by high finished-product inventories, operating rates remain low, purchases are mainly small rigid-demand orders, overall volume is limited, and substantive support for the market is insufficient. The current fundamentals remain in a phase of bullish expectations versus bearish reality. Upward drivers come mainly from higher valuations brought by stronger coal prices on the cost side and from sentiment support amid continued export news disruption, but a substantive reversal of the loose supply-demand balance still requires clearer fundamental changes. Going forward, attention should be paid to the pace of export policy implementation, the extent to which maintenance-related output cuts are realized, and marginal changes brought by the start of autumn purchasing.

Specifically, prices in Northeast China were stable at 1,790-1,810 yuan/tonne. East China rose to 1,780-1,820 yuan/tonne. Central China rose to 1,760-1,920 yuan/tonne. North China fell to 1,620-1,870 yuan/tonne. South China rose to 1,800-1,860 yuan/tonne. Northwest China was stable at 1,860-1,910 yuan/tonne. Southwest China was stable at 1,660-1,900 yuan/tonne.

Market Price Overview:

September 14: Guangzhou, Guangdong urea delivered reference price was 1,840-1,850 yuan/tonne, unchanged from the previous working day.

September 14: Nanning, Guangxi urea delivered reference price was 1,800-1,810 yuan/tonne, raised from the previous working day.

September 14: Shijiazhuang, Hebei urea delivered reference price was 1,780-1,860 yuan/tonne, basically unchanged from the previous working day.

September 14: Wen'an, Hebei urea delivered reference price was 1,780-1,860 yuan/tonne, basically unchanged from the previous working day.

September 14: Shangqiu market small and medium granule mainstream reference price was 1,750-1,800 yuan/tonne, with large granules at around 1,880-1,900 yuan/tonne.

September 14: Jingmen market small and medium granule mainstream reference price was 1,770-1,780 yuan/tonne, temporary station self-pickup reference at around 1,730-1,750 yuan/tonne, and large granule station self-pickup mainstream price at 1,880-1,920 yuan/tonne.

September 14: Tieling, Liaoning ex-warehouse or truck pick-up reference price was 1,790-1,810 yuan/tonne, unchanged from the previous working day.

September 14: Heze, Shandong urea delivered reference price was around 1,740-1,750 yuan/tonne, down 40 yuan/tonne from the previous working day.

September 14: Linyi, Shandong urea delivered reference price was 1,770-1,790 yuan/tonne, up 30 yuan/tonne from the previous working day.

September 14: Xianyang market mainstream reference price was 1,800-1,820 yuan/tonne, unchanged from the previous working day.