Urea Daily Review: Weather Affects Factory Shipments, Market Sentiment Mostly Observational
Domestic Urea Price Index:
According to Feidoodoo data, on January 17th, the urea small particle price index was 2330.59, a decrease of 2.86 from yesterday, a decrease of 0.12% month-on-month, and a decrease of 16.49% year-on-year.
Urea Futures Market:
Today, the urea UR405 contract opened in 2080, with a high of 2085 and a low of 2033, a settlement price of 2053, and a closing price of 2044. This is a decrease of 40 compared to the previous trading day's settlement price, down 1.92%, with a daily fluctuation range of 2033-2085. The Shandong area basis for the 05 contracts is 216; the 05 contracts increased its position by 9032 hands today, with a current holding of 184,300 hands.
Spot Market Analysis:
Today, the domestic urea market price slightly declined, overall showing large stability with minor adjustments. Earlier agricultural demand slowed down due to snowfall, with most prices remaining stable.
Specifically, prices in the Northeast region fell to 2320-2370 RMB/ton. In the North China region, prices fell to 2080-2370 RMB/ton. Prices in the East China region remained stable at 2230-2310 RMB/ton. In the South China region, prices rose to 2400-2430 RMB/ton. In Central China, prices for small and medium-sized particles fell to 2220-2420 RMB/ton, while prices for large particles remained stable at 2390-2430 RMB/ton. Prices in the Northwest region remained stable at 2230-2240 RMB/ton. In the Southwest region, prices remained stable at 2300-2800 RMB/ton.
Market Forecast:
From the factory perspective, most manufacturers have had better low-price orders recently. With pending orders supporting, current factory prices are mostly stable, with some factories under shipping pressure continuing to slightly lower prices to attract orders. Market-wise, affected by snowy weather, transportation for shipments from some regional factories is obstructed, and earlier agricultural demand slowed down slightly, leading to a mostly observational market follow-up. On the supply side, supply is slowly increasing. Some Southwest region plants that were shut down earlier will resume later this month, gradually increasing daily production, and influencing the bearish supply side. In terms of demand, downstream industry and agriculture maintain just-in-time follow-up with cautious purchasing sentiment, primarily following up with sporadic small orders.
Overall, the current urea market is affected by weather, hindering shipments and slowing down downstream follow-up, with a predominantly observational sentiment. It is expected that the urea market prices will continue to maintain large stability with minor adjustments in the short term.
