As the National Day holiday comes to an end and downstream demand briefly advances, the domestic urea market is gradually showing signs of recovery. Local prices have slightly increased to test the market. However, there are still two sides of the market sentiment: gambling and caution. One side operates back-to-back, while the other side bets on price increases to reserve a certain amount. However, from the overall sufficient supply of urea and the actual lukewarm demand, the overall increase is limited, and the time for price increases to be maintained may also be limited. The volatile market will be the norm.

From a price perspective, the mainstream ex factory price of urea in the main production areas has risen to around 1800-1900 yuan/ton, with the mainstream ex factory price in Shanxi region increasing by nearly 1800 yuan/ton, and the mainstream ex factory price in Shandong, Jiangsu, Anhui and other regions increasing by around 1800-1900 yuan/ton. The sales market price has risen accordingly, but the enthusiasm of grassroots markets and industrial compound fertilizer enterprises to purchase goods is average. Therefore, whether the urea price increase can become a "one-sided wish" depends on the comprehensive factors such as the start of urea enterprises, the start of compound fertilizer plants, and domestic policy adjustments.

Firstly, the production of urea enterprises is still generally at a high level. Especially with urea prices currently on the rise, it has stimulated the production enthusiasm of enterprises. According to statistics from China Fertilizer Network, the daily production of urea is around 190000 yuan. At present, except for a few enterprises that have stopped for maintenance, the production of enterprises is generally maintained at a high level, and the environmental protection and production restrictions in the Jincheng area of Shanxi have not yet begun. In addition, the pressure on enterprises previously dragged down by costs has eased, and enterprises have no plans to stop or reduce production; In addition, the liquid ammonia market, which is closely related to it, will no longer be restricted in the transportation of hazardous chemical vehicles after the holiday ends. Downstream ammonia consuming enterprises should make progress in receiving goods, and after the inventory pressure of liquid ammonia enterprises is relieved, it will provide certain support for the urea market; However, from the perspective of starting production, the supply pressure of urea enterprises is difficult to alleviate, as there are still new production capacities ready to be released, which will have a certain impact on the urea market.

Secondly, the demand for urea is lukewarm, and there is a certain degree of betting on the downstream market in the later stage. The overall demand performance is average. The procurement demand in agriculture is relatively scattered, and there is a strong wait-and-see attitude in the grassroots market. In addition, there is a certain amount of urea inventory waiting to be digested in the market, so there is a relatively pessimistic expectation for the market in October; In addition, since the light storage policy became clear, it has been in a relaxed state for the overall market, and its boosting effect on the later trend is not significant; The operation of compound fertilizer plants in the industrial sector is still at a low level, and the progress of finished fertilizer delivery is slow. The high inventory level makes it difficult to lower, resulting in low production enthusiasm and slow progress in following up on new urea orders; Furthermore, from the perspective of domestic tightening policies, the export of urea is still restricted and there is no sign of relaxation, which lacks a boost to the already oversupplied domestic market.

Due to the recent adjustment of the domestic financial market, the urea market has also been boosted to a certain extent, indicating that the urea market is frequently affected by relevant policies; Moreover, the price of raw coal has not changed much, which has a limited impact on the cost of urea enterprises. In addition, due to the frequent fluctuations in urea prices, the downstream market's attitude towards urea reserves has changed, and there are mostly multiple on-demand purchases.

Overall, urea companies are operating at a high level, with sufficient overall supply or partial oversupply, but demand is weak. Downstream operations are mostly back-to-back, and light storage has not provided sufficient support. It is expected that prices will not be too high; But with the end of the holiday, there will be a brief push for downstream delivery, and there may still be a possibility of appropriate price increases. The long-term trend still needs to pay attention to the progress of downstream production and procurement.