Nanhua Futures(SH:603093) Nan Hua Qi Huo·2025-12-28 13:09Report Industry Investment Rating No relevant information provided. Core Viewpoints - Urea is in a stage of supply surplus due to the continuous release of new production capacity, and its price center in 2026 will further decline, but the decline will be supported by export policies. In the first half of 2026, corresponding to the peak agricultural demand season, exports are likely to be suspended, and the urea market will fluctuate according to the demand rhythm. In the second half of the year, export policies will be relied on to relieve the domestic supply pressure, and the price trend will be policy - dominated. The urea 05 contract has an expectation of price increase during the domestic demand peak season, probably starting one month before the Spring Festival in 2026, with the top - end range between 1850 - 1950 yuan/ton. It is recommended to try to buy far - month contracts [3]. - The short - term domestic urea market is in a weak and stalemate state. The current urea market is mainly in a narrow - range rebound and then a stalemate, with an overall oscillating trend, but the bottom - end range may continue to rise [11][17]. Summary by Directory Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - The urea market is in a supply - surplus stage due to new capacity release. In 2026, the price center will decline but be supported by export policies. The 05 contract has a price - increase expectation during the domestic demand peak season, likely starting one month before the 2026 Spring Festival, with a top - end range of 1850 - 1950 yuan/ton. It is advisable to try buying far - month contracts [3]. - Although new delivery warehouses have been added for urea, the cheapest deliverable locations are still Henan and Shandong. Considering the disappearance of the export expectation for the 01 contract, the 1 - 5 month spread should be in a reverse - arbitrage position. The 01 contract still has a premium due to the autumn fertilizer expectation [6]. 1.2 Trading - Type Strategy Recommendations - Trend Judgment: Urea is expected to operate in a weak and oscillating manner. The UR2601 is expected to trade in the range of 1550 - 1750 yuan/ton. It is recommended to short at prices above 1750 yuan/ton and to conduct reverse - arbitrage for the 1 - 5 month spread when it is above - 10 [13]. - Basis, Month - Spread, and Hedging Arbitrage Strategy Recommendations - Basis Strategy: The 11, 12, and 01 contracts have a weak unilateral trend, while the 02, 03, 04, and 05 contracts are strong due to peak - season demand expectations [14]. - Month - Spread Strategy: The upper pressure on the 01 contract is 1710 - 1720 yuan/ton, and the lower static support is 1550 - 1620 yuan/ton, with dynamic fluctuations. It is recommended to short the 01 contract at high prices and conduct reverse - arbitrage for the 1 - 5 spread at high prices [14]. - Hedging 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: 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 may attract spontaneous reserves. India's NFL has issued a new urea import tender, intending to purchase 1.5 million tons (800,000 tons on the west coast and 700,000 tons on the east coast), with a bid - closing date of January 2, 2026, and a validity period until January 16, and the latest shipping date of February 20 [16]. - Negative Information: As of this week, the domestic daily urea production is 208,100 tons. Next week, the maintenance devices of Shandong Union and Jiangsu Linggu will gradually resume, while some gas - based urea plants in Inner Mongolia and Sichuan are expected to have concentrated maintenance. The domestic daily urea production is expected to decline significantly after a narrow - range upward fluctuation. If the maintenance expectation is fulfilled, the domestic daily urea production is likely to drop to around 200,000 tons [16]. 2.2 Next Week's Important Events to Watch - China's urea production this week is 1.3153 million tons, a week - on - week increase of 37,400 tons or 2.93%. Next week, China's weekly urea production is expected to be around 1.34 million tons, continuing to increase. There are no plans for plant shutdowns in the next cycle, and 5 - 6 plants may resume production [18]. Chapter 3: Disk Interpretation 3.1 Price - Volume and Capital Interpretation - The domestic urea market continued to rise firmly over the weekend, with an increase of 10 - 40 yuan/ton. The mainstream prices of small and medium - sized granules in the main regions are between 1510 - 1630 yuan/ton. Driven by the news of the fourth batch of urea export quotas and the new Indian tender, the market sentiment is strong, but the downstream resistance is emerging. The short - term market will continue to be stable with a slight upward trend [19]. - The weak domestic demand is the main contradiction. It is expected that the increase in exports cannot make up for the weakening domestic demand. The demand from compound fertilizer and industrial sectors is weak, and the price - driving force is limited. Therefore, the medium - term trend is under pressure, and the 1 - 5 month spread of urea is in a reverse - arbitrage pattern [20]. 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 20 - day rolling volatility of 27.16% and a historical percentile of 62.1% over three years [26]. - Urea Hedging Strategy Table - Inventory Management: For enterprises with high finished - product inventory worried about price drops, they can short urea futures to lock in profits and cover production costs, with a 25% hedging ratio and an entry range of 1800 - 1950 yuan/ton. They can also buy put options to prevent large price drops and sell call options to reduce capital costs, with a 50% and 50% hedging ratio for buying put options and selling call options respectively, and corresponding entry ranges [26]. - Procurement Management: For enterprises with low regular procurement inventory, they can buy urea futures at present to lock in procurement costs, with a 50% hedging ratio and an entry range of 1650 - 1750 yuan/ton. They can also sell put options to collect premiums and reduce procurement costs, with a 75% hedging ratio and an entry range [26]. Chapter 4: Valuation and Profit Analysis 4.1 Upstream Profit Tracking of the Industrial Chain - The report provides seasonal data on the production cost and profit of urea production methods such as fixed - bed, water - coal slurry gasification, etc., but specific profit - related analysis is not elaborated [27][28][31]. 4.2 Upstream Capacity Utilization Tracking - The report shows seasonal data on the daily production, weekly capacity utilization, coal - based capacity utilization, and natural - gas - based capacity utilization of urea, reflecting the production - side situation [36][37][38]. 4.3 Upstream Inventory Tracking - The report presents seasonal data on the weekly enterprise inventory, port inventory, and inventory in Guangdong and Guangxi of urea, as well as the total inventory of ports and inland areas [39][40][41]. 4.4 Downstream Price and Profit Tracking - The report provides seasonal data on the capacity utilization, inventory, production cost, production profit, and market price of downstream products such as compound fertilizer and melamine, reflecting the downstream market situation [45][46][47]. 4.5 Spot Sales and Production Tracking - The report shows seasonal data on the average sales and production of urea in different regions such as Shandong, Henan, etc., reflecting the spot - market sales and production situation [69][70][71].