October 15 Urea Daily: Loose Supply-Demand Pressure, Market Weak and Stalemated

Domestic Urea Price Index:

According to FDD data estimates, the urea small-granule price index on October 15 was 1768.64, down 0.45 from the previous working day, down 0.03% week on week, and up 8.66% year on year.

Urea Futures Market:

Today the UR2701 contract opened at 1664, with a high of 1666, a low of 1649, a settlement price of 1658, and a closing price of 1658; the close was -23 versus the previous trading day's settlement price, down 1.37% week on week, and the Shandong basis for the 01 contract was +62; the 01 contract added 13,022 lots today, with open interest at 316,850 lots so far.

Today the urea futures board maintained a weak, range-bound posture, with the trend under simultaneous pressure alongside spot fundamentals. The core of board trading remains centered on the reality of loose supply and demand; downstream demand has not yet shown substantive recovery, purchasing and restocking remain cautious, capping the board's rebound room. Although the market holds policy floor expectations and cost bottom support, and as spot prices keep falling expectations for subsequent winter-storage stocking have warmed somewhat, providing some sentiment support, there is a lack of sufficiently strong real improvement in the short term, making it hard to reverse the weak pattern; the market is in a stage where fundamental reality and forward fertilizer-stocking expectations contend with each other, and during the gap period the board lacks incremental drivers while sentiment is cautious overall. Overall, urea futures will most likely maintain a stalemated, weak range-bound pattern in the short term; if new orders remain insufficient, plant inventory pressure builds and enterprises again concede on prices to ship, the board may follow spot lower; conversely, if export volumes materialize or reserve demand starts, a phased repair is possible. Going forward, continued tracking is needed of downstream procurement pace, overseas order progress, and the release of reserve demand.

Spot Market Analysis:

Today the domestic urea spot market ran steady-to-weak. Although there are floor expectations at the policy level, terminal demand follow-through is weak and plant new-order transactions are under pressure; the current loose supply-demand situation remains the core contradiction behind the market's lack of upward momentum. Some plants cut quotes to stimulate shipments, order conditions improved slightly, and the pace of price decline slowed to some extent, yet the overall market remains biased toward weak range-bound trading; nevertheless, cost support and forward export expectations provide some floor for prices. From a supply-demand fundamental perspective, overall supply remains on the ample side; on the demand side, agricultural autumn fertilizer demand for urea is fairly limited, and operating-rate increases in compound fertilizer and downstream industry are limited, with substantive demand release on the weak side. Overall, the urea market will maintain a stalemate in the short term; if new orders continue to fail to expand and plant inventory pressure accumulates, further price concessions to ship cannot be ruled out. However, there is still bottom support on the raw material side, so the room for a deep decline is limited. Going forward, focus on the landing of positive export developments and the pace at which real demand and reserve demand start up.

Overall, the domestic urea spot market is currently running weak. On the supply side, previously maintained units are gradually resuming, industry daily output has risen somewhat, supply pressure is gradually accumulating, and overall supply remains loose; on the demand side, although enterprises have the need to collect orders and ship before the holiday, terminal demand has shown no obvious improvement, downstream players maintain rigid-demand procurement, agricultural autumn fertilizer stocking is limited, operating-rate increases in compound fertilizer and industry are limited, and substantive demand release is weak. The market is currently in a game stage where cost support and export diversion provide a floor while loose supply and demand exert pressure; prices may still loosen and move lower in the short term, but the room for a deep decline is limited; if prices fall to low levels, it may trigger the release of bargain-hunting sentiment.

Specifically, prices in Northeast China held steady at 1,790-1,810 yuan/t. Prices in East China held steady at 1,700-1,730 yuan/t. Prices in Central China held steady at 1,710-1,920 yuan/t. Prices in North China held steady at 1,570-1,800 yuan/t. Prices in South China held steady at 1,800-1,840 yuan/t. Prices in Northwest China held steady at 1,860-1,910 yuan/t. Prices in Southwest China held steady at 1,650-1,900 yuan/t.

Urea Small-Granule Market Quotes Overview (yuan/t)

Market News Updates:

Oct 15: The reference receiving price of urea in the Guangzhou, Guangdong market was 1,800-1,820 yuan/t, with the low end cut from the previous working day.

Oct 15: The reference receiving price of urea in the Nanning, Guangxi market was 1,780-1,800 yuan/t, down from the previous working day.

Oct 15: The reference receiving price of urea in the Shijiazhuang, Hebei market was 1,710-1,750 yuan/t, basically flat versus the previous working day.

Oct 15: The reference receiving price of urea in the Wen'an, Hebei market was 1,720-1,740 yuan/t, basically flat versus the previous working day.

Oct 15: Today the mainstream reference for medium/small granules in the Shangqiu market was 1,710-1,730 yuan/t, and large granules were around 2,040-2,050 yuan/t.

Oct 15: Today the mainstream reference for medium/small granules in the Jingmen market was 1,730-1,740 yuan/t, platform self-pickup was temporarily around 1,690-1,720 yuan/t, and large-granule platform self-pickup mainstream was 2,020-2,030 yuan/t.

Oct 15: The ex-warehouse/pickup price in the Tieling, Liaoning market was 1,780-1,800 yuan/t, flat versus the previous working day.

Oct 15: The reference receiving price of urea in the Heze, Shandong market was around 1,700-1,710 yuan/t, basically flat versus the previous working day.

Oct 15: The reference receiving price of urea in the Linyi, Shandong market was 1,710-1,720 yuan/t, basically flat versus the previous working day.

Oct 15: The mainstream price in the Xianyang market was 1,800-1,820 yuan/t, flat versus the previous working day.