Recently, the performance of the urea market is still eye-catching in the fertilizer market, with price fluctuations and ample supply. Even though the inventory in the downstream market is limited, demand is also weak. The overall market generally presents a state of "wolf before tiger", but its price has always been high. Even if there is a periodic decline, price reduction and order taking have not been panic driven. Even since yesterday, a small number of urea companies in Shandong and Lianghe regions have raised their prices slightly by 10-20 yuan/ton. However, prices in other regions have also declined steadily, and the actual transaction performance has been average. If the price rises are not detected, they are not a real improvement in the market. The growth and price increase regions are limited, and the long-term trend is still bearish. However, as some traders have said, how far is the long-term trend? The influencing factors are too volatile, and attention needs to be paid.

According to Zhongfei.com, the current factory quotation for mainstream urea in Henan has slightly increased to 2680-2710 yuan/ton, while the factory quotation for mainstream urea in Hebei has slightly increased to 2680-2690 yuan/ton. Some urea quotations in Northeast, Inner Mongolia, and Northwest China have been lowered, such as the factory quotation for mainstream urea in Northeast China, which has fallen to 2750-2808 yuan/ton. There is still a situation where the wholesale price of dealers is not available. For example, the local urea platform price in Jiangsu was about 2730 yuan/ton a few days ago, and the local wholesale price in Henan was about 2730-2750 yuan/ton. The downstream wait-and-see mood is heavy, with orders being supplemented based on demand, lacking centralized delivery support. The future trend depends on multiple factors such as supply and demand, futures, and cost.

One of the key factors behind the decline in urea production is the long-term high level of commencement. According to the statistics of China Fertilizer Network, the total daily urea production is about 159600 tons. A urea plant that has been shut down for inspection in Inner Mongolia is preparing to resume production at the weekend, while a gas head urea enterprise in Sichuan is preparing to resume production at the end of the month, and the natural gas supply is also sufficient; In addition, the domestic liquid ammonia price this week can be said to be "fully sunk", with a significant decline in prices. In many places, prices have fallen below 4000 yuan/ton, including the mainstream factory reference prices in Shanxi and Shaanxi regions, which have fallen to 3600-3800 yuan/ton, but demand is still poor, and there is still room for downward exploration in some areas. There may be a small number of enterprises tilting their production focus slightly towards urea.

From the perspective of demand, due to the impact of continued high urea prices, the downstream market, especially the grassroots market, maintains a pace of "on demand, on demand", with relatively limited inventory reserves; Large and medium-sized traders operate carefully on urea, mainly purchasing on demand, and the follow-up amount of replenishment orders is average. In addition, light storage fertilizer is also being sold; However, due to the low inventory and short-term demand support in the downstream market, urea, which should have been reduced in price, has been strong or has the opportunity to explore in the short term. In terms of industry, the commencement of compound fertilizer plants is still only about 40%. However, from the perspective of fertilizer prices and policies in the summer, the production enthusiasm of compound fertilizer enterprises is not high, and the procurement volume of raw material urea is limited. Moreover, some enterprises are still digesting the high price raw material inventory in the early stage. In addition, international prices are low, urea exports have no advantage, and there is a situation of backflow in the port. The domestic market lacks support.

In addition, coal prices fluctuate, but for urea enterprises, there is no cost pressure for the time being; Recently, the futures market has a significant impact on the spot price of urea, leading to frequent fluctuations in the spot price; In addition, the decline in the price of ammonium chloride has increased compared to the previous period, prompting some compound fertilizer enterprises to purchase ammonium chloride instead of some urea for use.

In summary, the urea market is affected by the overlapping positive and negative factors, as well as the low acceptance of high-priced urea in the downstream market. Although there is just a need for support, it is difficult to have the expectation or willingness to make significant adjustments in the short term, which should be a small move under a deadlock.