Nanhua Futures(SH:603093) Nan Hua Qi Huo·2025-12-07 12:32Report Industry Investment Rating No relevant content provided. Core Viewpoints - The urea market is within the range of fundamentals and policies. In the short term, its downside is strongly supported, but there is also pressure on the upside. The 01 contract is expected to continue its oscillating trend [3]. - The short - term spot price of urea is significantly supported, and the sentiment in the industry has improved. The short - term domestic urea market is stable with a slight upward trend [3]. - The medium - term trend of urea is under pressure, and the 1 - 5 month spread is in a reverse arbitrage pattern [21]. Summary by Directory Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - In the context of the fourth batch of export quotas driving speculation, trading was strong in the first half of the week and weakened in the second half. It is expected that upstream enterprises will still be in a stage of slight destocking next week [3]. - Supported by policy supply guarantees and the repair of production profits, the daily output of urea is expected to remain high, and high supply exerts significant pressure on prices. However, timely and continuous adjustments to export policies relieve pressure on the fundamentals, weakening the downward driving force of prices [3]. - Due to the continuous restocking in Northeast China for two weeks, the willingness of compound fertilizer factories and traders to chase high prices is gradually weakening. But the continuous destocking of explicit urea inventories provides support for prices [3]. - Although new delivery warehouses have been added for urea, the locations of the cheapest deliverable goods are still Henan and Shandong. Considering the disappearance of export expectations for the 01 contract, the 1 - 5 month spread is in a reverse arbitrage situation. Since the 01 contract still has expectations for autumn fertilizers, there is still a premium for the urea 01 contract [6]. 1.2 Trading - type Strategy Recommendations - Trend Judgement: Urea is oscillating weakly. The price range of UR2601 is 1550 - 1750 yuan/ton. It is recommended to lay out short positions at prices above 1750 yuan/ton and lay out reverse arbitrage when the 1 - 5 month spread is above - 10 [13]. - Base - difference, Month - spread and Hedge Arbitrage Strategy Recommendations: - Base - difference Strategy: The 11, 12, and 01 contracts have a weak unilateral trend. The 02, 03, 04, and 05 contracts are strong contracts with expectations of peak - season demand [14]. - Month - spread Strategy: The upper pressure on the 01 contract is 1710 - 1720 yuan/ton, and the static support below is 1550 - 1620 yuan/ton, with dynamic fluctuations. From the perspective of the terminal value of the 01 contract, it is recommended to lay out short positions at high prices; conduct reverse arbitrage on the 1 - 5 spread at high prices [14]. - Hedge Arbitrage Strategy: None [15]. Chapter 2: This Week's Important Information and Next Week's Attention Events 2.1 This Week's Important Information - Positive Information: - On November 6, India announced a new round of urea import tenders for 250 tons, with 125 tons each for the east and west coasts, and the shipping date is January 15, 2026 [16]. - The fourth quarter is the winter storage period for the fertilizer industry. The national off - season reserve is concentrated from December to March, and the relatively low price level may also attract spontaneous reserves [16]. - Negative Information: As of this week, the daily output of domestic urea is 20.81 tons. Next week, the maintenance devices of Shandong Union and Jiangsu Linggu will gradually resume, and some gas - based urea plants in Inner Mongolia, Sichuan and other places have concentrated maintenance expectations. After a narrow upward fluctuation, the domestic daily output of urea is expected to decline significantly. If the maintenance expectations are fulfilled, the domestic daily output of urea is likely to drop to around 20 tons [17]. 2.2 Next Week's Important Events to Follow - The output of Chinese urea production enterprises is 131.53 tons, an increase of 3.74 tons from the previous period, a month - on - month increase of 2.93%. It is expected that the weekly output of Chinese urea next week will be around 134 tons, continuing to increase from this period [19]. Chapter 3: Disk Interpretation 3.1 Price - Volume and Capital Interpretation - Over the weekend, the domestic urea market continued to rise firmly, with an increase of 10 - 40 yuan/ton. The prices of small and medium - sized particles in the mainstream regions are in the range of 1510 - 1630 yuan/ton. Driven by the fourth batch of urea export quotas and the news of a new round of Indian tenders, the sentiment in the market is obviously bullish, and upstream urea factories continue to raise prices, while downstream resistance is emerging. The short - term market will continue to be stable with a slight upward trend [20]. - The weak domestic demand is the current main contradiction. It is expected that the increase in exports cannot make up for the weakening of domestic demand. The demand for compound fertilizers and industrial use is relatively weak, and the driving force for prices is also limited. Therefore, the medium - term trend is under pressure, and the 1 - 5 month spread of urea is in a reverse arbitrage pattern [21]. 3.2 Industry Hedging Recommendations - Urea Price Range Forecast: The price range of urea is predicted to be 1650 - 1950 yuan/ton, with a current volatility (20 - day rolling) of 27.16% and a historical percentile of 62.1% over three years [27]. - Urea Hedging Strategy Table: - Inventory Management: For enterprises with high finished - product inventories worried about falling urea prices, it is recommended to short urea futures to lock in profits, buy put options to prevent sharp price drops, and sell call options to reduce capital costs [27]. - Procurement Management: For enterprises with low regular procurement inventories, it is recommended to buy urea futures at present to lock in procurement costs in advance, sell put options to collect premiums and reduce procurement costs, and buy put options to lock in the purchase price if the urea price falls [27]. Chapter 4: Valuation and Profit Analysis 4.1 Upstream Profit Tracking in the Industrial Chain - The report provides seasonal data on the weekly fixed - bed production cost, natural - gas - based production cost, and water - coal - slurry gasification production profit of urea [29][31][33]. 4.2 Upstream Operating Rate Tracking - The report presents seasonal data on the daily output, weekly capacity utilization rate, coal - based capacity utilization rate, and natural - gas - based capacity utilization rate of urea [37][39]. 4.3 Upstream Inventory Tracking - The report shows seasonal data on China's weekly enterprise inventory, port inventory, Guangdong and Guangxi inventory, and total inventory (port + inland) of urea [41][43][45]. 4.4 Downstream Price and Profit Tracking - The report provides seasonal data on the weekly capacity utilization rate, inventory, production cost, production profit, and market price of compound fertilizers, as well as the weekly output, capacity utilization rate, market price, and production profit of melamine, and the daily market price of synthetic ammonia in the Henan market [47][50][54][66]. 4.5 Spot Production and Sales Tracking - The report shows seasonal data on the average production and sales of urea and the production and sales of urea in Shandong, Henan, Shanxi, Hebei, and East China [69][71].