Picture source: Wenhua Finance
Futures : The main contract price of urea moved higher after opening flat. The futures price opened at 2,466 yuan/ton, with the lowest falling back to 2,460 yuan/ton. Later, the price fluctuated, consolidated, and expanded towards the end of the trading. rose, with the highest going up. It went to 2533 yuan / ton and closed at a big positive line entity with short upper and lower shadow lines , with an increase of 1.86%. The trading volume has been reduced compared with , and the position has declined, especially during the late rally.
Domestic urea factory prices continue to fall today, as the epidemic spreads from north to south, transportation further puts pressure on demand, and the operating rate of downstream plywood companies continues to decline. As the Spring Festival approaches, factory holidays may be brought forward, industrial demand slows down, and urea spot quotes continue to fall. Today, the ex-factory price range of urea factories in Shandong, Henan, and Hebei is as high as 2,630-2,700 yuan/ton.
Urea futures price rebounded higher, while spot prices continued to fall, and the basis of urea futures has narrowed. Taking Shandong as the benchmark, the basis of the January contract of urea is about 126 yuan/ton, and the basis of the May contract of urea is about 224 yuan/ton. The basis is at a relatively high level in the same period. As the January contract approaches the delivery month, the basis will return to demand. For upstream risk-exposed companies, they can appropriately expand their guaranteed positions.
In terms of supply, on December 21, domestic daily urea production was 149,000 tons, which was the same as the previous month. was 16,000 tons higher than last year, and the operating rate was about 63.3%. Recently, southwest and northwest gas head urea companies have begun to suspend gas operations. However, the weekly average daily output of coal-based urea has increased recently, and the daily production scale is still relatively high year-on-year.
The futures price of urea May contract rebounded and rose. The changes in the spot market were limited, and the current price continued to fall. From a fundamental point of view, Nissan's current production scale is still at a high level year-on-year, while downstream industrial demand has slowed down due to factors such as the epidemic and approaching holidays, and the current price of urea, which is above the cost line, has begun to correct. At present, there are no further bullish themes in the market. Recently, we are paying attention to the procurement situation of compound fertilizer companies and storage companies, as well as changes in urea production and demand inventory data on Thursday. Recently, has fluctuated at high levels and has been supported by 2450 below and pressure near 2580-2630 above.
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--Guantong Futures Co., Ltd. (has obtained the futures investment consulting business qualification licensed by China Securities Regulatory Commission )
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