Urea Daily Review: Policy Support Signals Provide a Floor, but Fundamental Follow-Through Remains Weak

Domestic Urea Price Index:

According to Feidoodoo data calculations, on August 10, the small-granule urea price index was 1788.18, down 13.37 from the previous working day, or -0.74% month on month, and down 0.19% year on year.

Urea Futures Market:

Today, the urea UR2609 contract opened at 1729, reached a high of 1730 and a low of 1717, settled at 1724, and closed at 1721. The closing price was down 3 from the previous trading day’s settlement price, or -0.17%. The Shandong basis for the 09 contract was -21. Open interest in the 09 contract increased by -6285 lots today, with current positions at 194711 lots.

The urea futures market maintained narrow fluctuations today. Supported by price-stabilization policy and expectations for India’s urea tender, market sentiment on the futures board remained relatively strong. However, as speculative sentiment was gradually released, real fundamental drivers remained insufficient. Nearby contracts are approaching delivery, limiting room for further bargaining, and subsequent movement still needs confirmation from improvement in the spot market. From a fundamental perspective, industry operating rates on the supply side remain high, market supply is sufficient, enterprise inventory pressure persists, and the loose supply pattern has not yet changed substantively. On the demand side, agricultural topdressing demand is regionally differentiated and has not yet formed concentrated procurement support. In the industrial sector, downstream users such as compound fertilizer and melamine producers maintain rigid-demand procurement, buying sentiment is cautious, and spot transaction sustainability is insufficient. Overall, short-term supply-demand contradictions in the domestic spot market are difficult to ease quickly. The market is temporarily likely to fluctuate while watching India’s tender price and the degree of policy implementation.

Spot Market Analysis:

The domestic urea spot market edged lower today. After prices rebounded slightly last week on policy signals, demand sustainability remained relatively limited. As the trading atmosphere weakened, pressure on upstream producers to secure new presale orders emerged, forcing them to lower prices again. From a fundamental perspective, current supply-demand contradictions remain. On the supply side, industry operating rates remain high, market supply is abundant, and enterprise inventory pressure continues. On the demand side, agricultural topdressing demand is regionally differentiated and has not formed concentrated procurement support, making it difficult to effectively push prices higher. In the industrial sector, only rigid-demand follow-up continues, downstream buyers remain cautious, and overall transactions are limited. Overall, short-term supply-demand contradictions in the domestic spot market are difficult to improve immediately. After sentiment is fully digested, the key will be whether policy positives can effectively transmit to spot fundamentals. The spot market is expected to maintain range-bound fluctuations in the short term. Follow-up attention should 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 were lowered to 1810-1840 yuan/tonne. Prices in East China were lowered to 1700-1770 yuan/tonne. Prices in Central China were lowered to 1720-1900 yuan/tonne. Prices in North China were lowered to 1610-1840 yuan/tonne. Prices in South China were lowered to 1830-1860 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 10: In Guangzhou, Guangdong, the reference receiving price for urea was 1850-1860 yuan/tonne, down from the previous working day.

August 10: In Nanning, Guangxi, the reference receiving price for urea was 1830-1840 yuan/tonne, unchanged from the previous working day.

August 10: In Shijiazhuang, Hebei, the reference receiving price for urea was 1740-1760 yuan/tonne, down 20 yuan/tonne from the previous working day.

August 10: In Wen’an, Hebei, the reference receiving price for urea was 1720-1740 yuan/tonne, down 10 yuan/tonne from the previous working day.

August 10: In Shangqiu today, mainstream reference prices for small and medium granules were 1720-1740 yuan/tonne, while large granules were around 1810-1830 yuan/tonne.

August 10: In Jingmen today, mainstream reference prices for small and medium granules were 1740-1750 yuan/tonne, while mainstream self-pickup prices for large granules at the station were 1800-1810 yuan/tonne.

August 10: In Tieling, Liaoning, ex-warehouse/truck pickup reference prices were 1820-1840 yuan/tonne, down 20 yuan/tonne from the previous working day.

August 10: In Heze, Shandong, the reference receiving price for urea was around 1700-1710 yuan/tonne, down 10 yuan/tonne from the previous working day.

August 10: In Linyi, Shandong, the reference receiving price for urea was 1700-1710 yuan/tonne, down 20 yuan/tonne from the previous working day.