Urea Daily Review: Production limited in Jincheng, Shanxi, leading to another price hike in the market.
Domestic Urea Price Index:
According to Feidoodoo data, the urea small granule price index on August 23rd was 2544.68, an increase of 22.59 from the previous day, up 0.9% month-on-month, and 6.67% year-on-year.
Urea Futures Market:
The opening price of the urea UR2401 contract was 2145, the highest price was 2269, the lowest price was 2136, the settlement price was 2238, and the closing price was 2269. The closing price rose by 149 compared to the settlement price of the previous trading day, up 7.03%. The daily fluctuation range was 2136-2269, with a price difference of 133. The 01 contract increased its position by 24,683 hands today, with a current holding of 355,903 hands.
Spot Market Analysis:
Today, the domestic urea market price has risen significantly, with an adjustment range of 20-150 yuan/ton. The main reason for this round of increase is the production limitation in Jincheng, which is a positive factor for the supply side.
Specifically, prices in the Northeast region rose to 2400-2480 yuan/ton. Prices in North China rose to 2400-2590 yuan/ton. Prices in the Northwest region were stable at 2510-2520 yuan/ton. Prices in the Southwest region rose to 2450-2800 yuan/ton. East China's prices rose to 2520-2600 yuan/ton. Central China's small granule prices rose to 2500-2680 yuan/ton, while large granule prices were stable at 2480-2550 yuan/ton. Prices in South China remained at 2600-2680 yuan/ton.
Market Forecast:
On the supply side, the Jincheng area of Shanxi has limited production for a week due to environmental factors. Although many companies will resume production in the coming week, as Jincheng is a major urea production area, the limitation will reduce the urea market supply and tighten spot availability. On the demand side, there is currently a certain demand in the agricultural market, and domestic demand is expected to increase. Additionally, compound fertilizer factories and export orders are followed up in an orderly manner. Some urea factories have received good orders and have consequently adjusted their factory quotations. There are also market rumors about labeling, which is affecting the mood of the spot and futures market, but the next tender time is still far away, and the uncertainty is high. After the coal mine accident in Shaanxi, coal prices have risen slightly.
In summary, domestic and export demands for urea are increasing, and the short-term daily production has decreased, leading to reduced company inventory and market supply shortages. It is expected that the urea market will show an upward trend in the short term.
