August 11 Urea Daily Review: Positive Factors Fail to Offset Strong Supply and Weak Demand, Market Edges Lower in Narrow Consolidation

Domestic Urea Price Index:

According to Feidoodoo data calculations, on August 11, the small-granule urea price index was 1792.27, down 2.73 from the previous working day, or -0.15% month on month, and up 0.04% year on year.

Urea Futures Market:

Today, the urea UR2609 contract opened at 1726, reached a high of 1728 and a low of 1688, settled at 1705, and closed at 1700. The closing price was down 24 from the previous trading day’s settlement price, or -1.39%. The Shandong basis for the 09 contract was -10. Open interest in the 09 contract increased by -8496 lots today, with current positions at 186231 lots.

The urea futures market continued weak fluctuations today. Although positive factors were concentrated, including domestic industry meetings and the implementation of India’s tender, the market weakened ahead of time as it struggled to price in higher optimism in the short term. The core contradiction of strong supply and weak demand in the off-season remains unchanged. Price-stabilization policy provides some bottom support, but substantive positives remain unclear and are not enough to effectively drive prices upward. Nearby contracts are currently approaching delivery, fund participation willingness is insufficient, bargaining room has narrowed, and the board lacks sustained rebound momentum. Fundamentals remain loose: on the supply side, operating rates remain high, supply is sufficient, and enterprise inventory pressure has not eased. On the demand side, agricultural topdressing demand is regionally differentiated, concentrated procurement has not formed, industrial downstream users only maintain rigid-demand procurement, buying is cautious, and spot transactions are weak. Overall, short-term supply-demand contradictions are difficult to ease, and policy positives still need time to transmit to the spot market. Futures prices are expected to mainly fluctuate weakly in the short term. Follow-up attention should focus on India’s tender result, the pace of autumn fertilizer preparation, and policy-side changes.

Spot Market Analysis:

The domestic urea spot market operated weakly today. Although India’s new 1.7 million-tonne import tender was launched, the second batch of export quotas was issued simultaneously, the policy symposium also made clear that current spot prices are already at a deeply low level, the exchange issued a risk warning letter, and the Nitrogen Fertilizer Industry Association again called on producers to stabilize prices and protect the market, trading sentiment remained stalemated and quiet. Some enterprises saw poor new order follow-up and slightly lowered quotations 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, and enterprise inventory pressure continues. 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 fell to 1790-1820 yuan/tonne. Prices in East China fell to 1690-1760 yuan/tonne. Prices in Central China fell to 1720-1900 yuan/tonne. Prices in North China fell to 1600-1810 yuan/tonne. Prices in South China fell to 1820-1860 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 11: In Guangzhou, Guangdong, the reference receiving price for urea was 1850-1860 yuan/tonne, unchanged from the previous working day.

August 11: In Nanning, Guangxi, the reference receiving price for urea was 1820-1830 yuan/tonne, down from the previous working day.

August 11: In Shijiazhuang, Hebei, the reference receiving price for urea was 1740-1750 yuan/tonne, basically unchanged from the previous working day.

August 11: In Wen’an, Hebei, the reference receiving price for urea was 1720-1740 yuan/tonne, basically unchanged from the previous working day.

August 11: In Shangqiu today, mainstream reference prices for small and medium granules were 1720-1740 yuan/tonne, while large granules were around 1820-1830 yuan/tonne.

August 11: 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 11: In Tieling, Liaoning, ex-warehouse/truck pickup reference prices were 1800-1820 yuan/tonne, down from the previous working day.

August 11: In Heze, Shandong, the reference receiving price for urea was around 1700-1710 yuan/tonne, basically unchanged from the previous working day.

August 11: In Linyi, Shandong, the reference receiving price for urea was 1700 yuan/tonne, basically unchanged from the previous working day.

August 11: In Xianyang, mainstream reference prices were 1800-1820 yuan/tonne, down from the previous working day.