August 12 Urea Daily Review: Loose Supply-Demand Pattern Remains Unchanged, Futures Prices Operate Weakly

Domestic Urea Price Index:

According to Feidoodoo data calculations, on August 12, the small-granule urea price index was 1787.73, down 4.55 from the previous working day, or -0.25% month on month, and up 0.36% year on year.

Urea Futures Market:

Today, the urea UR2609 contract opened at 1700, reached a high of 1703 and a low of 1682, settled at 1692, and closed at 1683. The closing price was down 22 from the previous trading day’s settlement price, or -1.29%. The Shandong basis for the 09 contract was +7. Open interest in the 09 contract increased by -9676 lots today, with current positions at 111457 lots.

The urea futures market continued to operate weakly today. Competition in India’s tender was intense and prices were relatively low, while the industry meeting has not yet produced a clear self-discipline mechanism, weakening short-term sentiment support. The core contradiction pressuring the market has still not shown expectations of reversal. On the supply side, plant operating loads remain high, daily output is at a relatively high level for the same period historically, new capacity continues to be released, and supply is sufficient. On the demand side, seasonal demand is weakening, agricultural topdressing is basically ending, compound fertilizer and melamine operating rates remain low, downstream users only maintain rigid-demand procurement, and buying is cautious. Enterprise inventories continue to accumulate, and the oversupply pattern is difficult to reverse in the short term. Although policy and export news provide some bottom support, including the implementation of the second batch of export quotas and the release of India’s tender, actual incremental demand is limited due to international prices and shipment pace, and inventory pressure has not been effectively eased. Overall, the market is in a tug-of-war between the weak reality of “high supply, high inventory, and weak demand” and strong expectations of “policy support and export expectations.” However, short-term positive factors are difficult to translate into higher expectations. The core off-season contradiction remains unchanged, the substantive benefit of price-stabilization policy is still unclear, and upward drivers are insufficient. Overall, short-term supply-demand contradictions are difficult to ease, and policy transmission will take time. Futures prices are expected to mainly fluctuate weakly. 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 operate weakly today. Current market wait-and-see sentiment is relatively strong, downstream follow-up is cautious, and some enterprises have poor new order follow-up, leading to slight quotation cuts to promote transactions. From a fundamental perspective, supply-demand contradictions have not eased. On the supply side, industry operating rates remain high, supply is abundant, 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 follow-up continues, compound fertilizer operating rates remain low, procurement strength is average, export policy has not changed, downstream buyers are cautious, and overall transactions are limited. Overall, short-term domestic spot supply-demand contradictions are difficult to improve quickly. After market sentiment is fully digested, attention should focus on whether policy positives can effectively transmit to spot fundamentals. 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 a narrow fluctuation pattern. 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 1690-1740 yuan/tonne. Prices in Central China fell to 1700-1900 yuan/tonne. Prices in North China remained stable at 1600-1810 yuan/tonne. Prices in South China remained stable at 1820-1850 yuan/tonne. Prices in Northwest China remained stable at 1860-1910 yuan/tonne. Prices in Southwest China remained stable at 1680-2080 yuan/tonne.

Market Updates:

August 12: In Guangzhou, Guangdong, the reference receiving price for urea was 1840-1850 yuan/tonne, down from the previous working day.

August 12: In Nanning, Guangxi, the reference receiving price for urea was 1820-1830 yuan/tonne, unchanged from the previous working day.

August 12: In Shijiazhuang, Hebei, the reference receiving price for urea was 1720-1750 yuan/tonne, down 20 yuan/tonne from the previous working day.

August 12: In Wen’an, Hebei, the reference receiving price for urea was 1700-1740 yuan/tonne, down 20 yuan/tonne from the previous working day.

August 12: 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 12: In Jingmen today, mainstream reference prices for small and medium granules were 1740-1750 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 12: 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 1690 yuan/tonne, down 10 yuan/tonne from the previous working day.

August 12: In Linyi, Shandong, the reference receiving price for urea was 1690 yuan/tonne, down 10 yuan/tonne from the previous working day.

August 12: In Xianyang, mainstream reference prices were 1800-1820 yuan/tonne, unchanged from the previous working day.