Last week, India announced a new round of urea bids, with bid opening on July 8, valid until July 18 and shipping until August 27. There is news that this round of bidding China may be out of export. But affected by this, the domestic market atmosphere was driven, spot prices slightly up, urea factory to send orders sufficient. Last week, the opening price of urea futures 09 contract was 2094 yuan (ton price, the same below), the lowest price was 2065 yuan, the highest price was 2154 yuan, and the final closing at 2141 yuan, the maximum fluctuation in the week was 89 yuan. In terms of transaction, the trading volume of urea futures 09 contract was 899,000 lots, down 117,000 lots week on week; the open position was 210,000 lots, basically flat week on week. Last week, the domestic urea spot price continued to rise, the factory in the case of sufficient orders continued to increase the factory price, traders low delivery without worry. Indian urea tender led to the domestic market atmosphere, domestic agricultural demand constitute the basis of spot upward. At the end of last week, the urea plant price tends to stabilize, the market follow-up momentum is insufficient. With the digestion of early orders, the spot price of urea is expected to decline this week. In terms of output, the daily output of domestic urea last week was 173,400 tons, down 55,500 tons from the previous month and up 50,000 tons year on year. In terms of agricultural demand, demand in central and western Inner Mongolia and Ningxia and Shaanxi remains strong; Guanzhong area of Shaanxi receives rainfall and agricultural demand starts; agricultural demand in eastern Inner Mongolia and Heilongjiang is weakened and transaction price is slightly decreased; rainfall in North China and Jianghuai region is delayed than in previous years, and the overall demand is delayed than in previous years, but the duration is longer. In terms of industrial demand, the operating rate of compound fertilizer plants continues to decline, the market adjusts prices, and the factory to buy raw materials for autumn fertilizer. Later demand form to wait for the urea market price decline, to see the start of compound fertilizer production. In the international market, India announced a new round of urea tender. Under the condition that China is expected to export before August, the Indian bid price is expected to be high and the quantity is small. After China's urea export is opened, the international urea price is expected to decline to a certain extent. In the futures market, the 09 contract showed a upward trend last week.Last Monday, the urea futures price declined due to the overall commodity futures market; since the release of the printed bid last Monday night, the futures price rose significantly and the basis converged significantly. The atmosphere of the domestic spot market began to rise under the support of printing sentiment and domestic agricultural demand, and the futures market also followed the trend, and the following three days entered the shock stage. Objectively speaking, the domestic agricultural market demand is the key to support the sustainability of the high price in the current spot market, and the instability of the supply side provides the basis for the continuation of the high price at the spot end. In the future, the domestic demand for compound fertilizer will dynamically delay the downward rhythm of the market price, and the uncertainty of the export end will bring huge disturbance to the market. From the perspective of the international market, the market facing India in this round of bidding is the strong international spot price in July, it remains to be seen whether India is in this round of bidding, but the market is mostly declining. If the volume of India in this round is insufficient, the subsequent bidding is expected to be large, and the export probability of Chinese urea in the later stage is high. Under the environment of strong supply and demand in the international market, the price is expected to fluctuate and fall, while the probability of China's domestic price is large. If the amount of bidding in this round is sufficient, the international demand will be weak after China's export liberalization in the later period, the international market price is expected to fall sharply, and the probability of China's domestic price will be high.(Agricultural materials guide report)
