Last week was the eighth week of urea futures listing on the Zhengzhou Commodity Exchange. The activity of UR2001 contract reached the lowest level since its listing, with daily turnover of less than 50,000 hands (1 million tons), of which 22,400 hands (448,000 tons) were contested on Friday, the lowest level since listing. In the spot market, urea transactions in the upper and middle reaches are active. Futures, spot turnover ice and snow days, the reasons behind, let me discuss together.

Last week, the domestic urea spot market ushered in environmental production restriction, which is the second largest environmental production restriction in the traceable historical record. Governments in Shandong, Shanxi, Hebei and Henan have issued papers calling for environmental protection and production restriction. Among them, cities in the "2 + 26" rank the first to carry out environmental protection production restriction, Shandong Dezhou, Shanxi Jincheng, Henan Anyang, Xinxiang and other urea production towns have received different degrees of production restriction orders. In Jincheng area of Shanxi Province, local urea producers can produce 17,000 tons of urea a day at full production. The production limit of this round is 10,000 tons, only 0.7 million tons are retained, and the starting rate after production limit is only 41%. In Dezhou, Shandong Province, local urea producers can produce nearly 0.8 million tons of urea a day at full production. The production limit of this round is 0.25 million tons, only 0.55 million tons are retained, and the starting rate after production limit is only 69%. The most prominent effect of production restriction is the reduction of urea supply. The daily output of urea in China dropped from 160,000 tons in the previous period to 138,000 tons, down 13.75%. Some urea factories are short of supply because of production restriction, and the price has been raised.

Last week, the second biggest event in the urea spot market was the pre-sale of the National Day holiday. National Day holiday pre-sale refers to the upstream urea factory receives the bill in advance before the National Day holiday to ensure that the finished urea products produced during the National Day holiday are available for sale, and there will be no case of urea finished products piled up in the factory warehouse. The upstream manufacturers made different progress in the National Day holiday pre-sale. Among them, Shandong Dachang completed the pre-sale task very early and successfully ensured the sale of urea products during the holiday; Shanxi Dachang gradually completed the urea pre-sale task with the promotion of production restriction; and Hebei Dachang completed the urea pre-sale task in general, and the pressure of delivery is still on.

_. The improvement of urea trading in the middle and upper reaches of the spot market has not brought about the trading atmosphere in the futures market. The futures market is cold and cool, and the competition is worse than the day by day. There are several reasons for the futures market's cooling-down. First, short-term funds are afraid to enter the futures market in large quantities because they are worried about the late environmental restrictions, the peak season of agricultural demand and India's bidding. Secondly, with the slow decline of the market, urea futures have reached an unsuitable position for further short-selling. At this time, the risk of short-selling is greater and the visible profit is limited. Thirdly, in order to avoid uncertain risks in the long vacation, the short-term funds are mostly off-site and wait-and-see.

_The main difference between urea spot and urea futures in the trading process is that the purpose of urea spot trading is to transfer the spot to realize production value and use value; the purpose of urea futures trading is to find the future price of urea spot and to anticipate the transaction. When the anticipation is not clear or even very vague, the market will be rational as a whole. When the attitude area treats urea futures, the competition of urea futures will naturally be low.