Urea Daily Review: Market Transactions Favor Lower Prices, Prices Undergo Narrow Adjustment
Domestic Urea Price Index:
According to the data calculated by Feidoodoo, on February 27th, the price index for small urea granules stood at 2316.95, marking an increase of 5.91 from the previous day, a 0.26% rise on a day-to-day basis, and a 16.89% decline on a year-to-year basis.
Urea Futures Market:
Today's urea UR405 contract opened at 2140, reaching a high of 2169 and a low of 2140, with a settlement price of 2159 and a closing price of 2164. The closing price increased by 32 compared to the settlement price of the previous trading day, reflecting a 1.50% day-to-day increase, with the day's fluctuation range between 2140-2169. The basis in the Shandong region for the May contract was 86; the May contract saw an increase of 2859 in open interest, with a total open interest of 182,800 hands by the end of the day.
Spot Market Analysis:
Today, the domestic urea market experienced a slight upward adjustment in prices, with enterprise quotations undergoing minor range adjustments better transactions at the lower end of the market, and many quotations tentatively rising.
Specifically, prices in the Northeast region remained stable at 2290-2360 RMB/ton. In the North China region, prices rose to 2120-2380 RMB/ton. In the East China region, prices increased to 2230-2290 RMB/ton. In the South China region, prices rose to 2380-2420 RMB/ton. In the Central China region, prices for small to medium granules increased to 2230-2380 RMB/ton, while prices for large granules remained stable at 2300-2400 RMB/ton. Prices in the Northwest region remained stable at 2260-2270 RMB/ton. In the Southwest region, prices remained stable at 2300-2600 RMB/ton.
Market Forecast:
From the perspective of factories, there is a reduction in order intake, leading to sales pressure, slight loosening in quotations, and price concessions to facilitate transactions. The increase in transactions for lower-end goods and improved order intake are noted. In terms of market dynamics, the market atmosphere is average, with transactions mostly maintained at the lower end, and prices may adjust upward following the trend. Regarding supply, there is an increase in plant maintenance, a decrease in operation rates, and a slight decrease in daily production, but the supply side still appears relaxed. In terms of demand, there is a slowdown in agricultural green returning purchases; however, the operation rates of downstream compound fertilizer factories continue to increase, leading to a continuous increase in industrial demand.
In summary, the current urea market is experiencing better transactions at lower-end prices, coupled with the expectation of reduced supply, which may lead to a narrow upward adjustment in enterprise quotations. Therefore, it is anticipated that the urea market prices will continue to exhibit narrow fluctuations in the short term.
