Urea Daily Review: Weak Demand Persists, Factories Continue to Lower Prices for Orders
Domestic Urea Price Index:
According to data from Feidoodoo, the urea small granule price index on January 18th stood at 2318.32, a decrease of 12.27 from the previous day, marking a 0.53% drop and a 16.98% year-on-year decline.
Urea Futures Market:
Today's urea UR405 contract opened in 2046, with the highest price in 2077 and the lowest in 2023. The settlement price was 2051, and the closing price was 2062, up 9 from the last trading day’s settlement, a 0.44% increase. The full-day range was 2023-2077. The 05 contract in the Shandong area had a basis of 188. Today's contract reduced holdings by 8969 hands, with a current holding of 175,300 hands.
Spot Market Analysis:
Today, the domestic urea market continued its downward trend, with factory outlet prices mostly stable but slightly declining, as they adjust their quotes for pre-Chinese New Year orders, causing a continuous downward shift in the market's focal point.
Specifically, prices fell to 2300-2340 RMB/ton in the Northeast region. In North China, prices dropped to 2050-2360 RMB/ton. In East China, prices declined to 2230-2290 RMB/ton. In South China, prices fell to 2390-2420 RMB/ton. In Central China, medium and small granule prices fell to 2200-2420 RMB/ton, and large granules to 2380-2400 RMB/ton. In Northwest China, prices remained stable at 2230-2240 RMB/ton. In Southwest China, prices stayed steady at 2300-2800 RMB/ton.
Market Forecast:
From the factory perspective, most factories are supported by pre-orders, with current quotes running stable and general new order transactions. The pressure to receive orders before the Chinese New Year still exists. In the market, the transaction atmosphere continues to be stagnant and cautious, with overall trading confidence weak and traders mainly following up with minimal necessary orders. Regarding supply, some previously shut-down plants are gradually resuming, slowly increasing daily production, anticipating an ample supply. On the demand side, in agriculture, after some regional bulk purchases, the pace of procurement has gradually slowed down, with a cautious sentiment and maintenance of minimal necessary follow-up. In industry, downstream shipments are weak, with continuous demand weakening and a cautious receipt mentality, leading to a subdued purchasing atmosphere.
In summary, the current urea market sees a resurgence of a tepid purchasing atmosphere. With the slight recent price increase, downstream acceptance is low, predicting continued overall stability with slight decreases in urea market prices in the short term.
