1. Report Industry Investment Rating - No information provided 2. Core Viewpoints of the Report - The urea market is currently in a state of overall supply exceeding demand in China, with high daily production and inventory levels, while international prices are strong. The export policy has not been liberalized beyond expectations. It is expected that the urea market will fluctuate today [4]. 3. Summary by Relevant Catalogs Urea Overview - **Fundamentals**: The urea futures price has fluctuated and declined recently. The market was affected by rumors of the liberalization of urea exports, leading to a rise in futures prices, but then market sentiment subsided. Currently, daily production and the operating rate remain at relatively high levels, and inventory is generally high. On the demand side, the operating rates of compound fertilizers and melamine in industrial demand are moderate, and agricultural demand is limited. Overall, supply exceeds demand significantly in the domestic urea market, export profits are still strong, and the export policy has not been liberalized beyond expectations. The spot price of the delivery product is 1840 (+10), and the fundamentals are generally neutral [4]. - **Basis**: The basis of the UR2601 contract is 94, with a premium - discount ratio of 5.1%, which is bullish [4]. - **Inventory**: The comprehensive UR inventory is 1.437 million tons (-20,000 tons), which is bearish [4]. - **Market**: The 20 - day moving average of the UR main contract is flat, and the closing price is below the 20 - day moving average, which is bearish [4]. - **Main Position**: The net long position of the UR main contract has turned bullish [4]. - **Expectation**: The main urea contract is expected to fluctuate. International urea prices are strong, the export policy has not been liberalized beyond expectations, and the domestic supply still significantly exceeds demand. It is expected that the UR will fluctuate today [4]. Factors Affecting the Market - **Bullish Factors**: International urea prices are strong [5]. - **Bearish Factors**: High operating rates and daily production, and weak domestic demand [5]. - **Main Logic**: The marginal changes in international prices and domestic demand [5]. Spot, Futures, and Inventory Data - **Spot**: The spot price of the delivery product is 1840 (+10), the Shandong spot price is 1840 (+10), the Henan spot price is 1850 (unchanged), and the FOB China price is 3102 [6]. - **Futures**: The price of the UR01 contract is 1746 (-7), the UR05 contract is 1791 (+2), and the UR09 contract is 1679 (-23). The basis of the UR01 contract is 94 [6]. - **Inventory**: The warehouse receipt is 6473 (unchanged), the comprehensive UR inventory is 1.437 million tons (-20,000 tons), the UR manufacturer inventory is 896,000 tons, and the UR port inventory is 541,000 tons [6]. Urea Supply - Demand Balance Sheet - From 2018 to 2024, urea production capacity, output, net imports, apparent consumption, and actual consumption generally showed an upward trend, with fluctuations in import dependence and consumption growth rates. In 2025E, the production capacity is expected to reach 49.06 million tons, with a growth rate of 11.0% [9].

Core Viewpoint - The urea market is expected to experience a downward price trend in the second half of 2025 due to seasonal demand fluctuations, high inventory levels, and ongoing supply pressures, despite potential short-term rebounds in August and September driven by agricultural demand and export activities [1][13]. Production Capacity and Profitability - In the first half of 2025, the urea industry added 3.51% in production capacity, totaling 309 million tons, with a theoretical capacity increase from 76.7 million tons to 79.39 million tons [2]. - The industry is projected to add another 292 million tons of capacity in the second half of 2025, leading to a total capacity increase of 7.31% for the year [2]. - The profitability of urea production is under pressure, with costs primarily driven by coal and natural gas prices, which account for about 70% of total production costs [2][3]. Cost Analysis - As of June 2025, the production costs for urea varied by production method, with natural gas-based urea costing 1971 CNY/ton, fixed bed process at 1917 CNY/ton, and fluidized bed process at 1478 CNY/ton [3]. - Profit margins for different production methods showed significant variation, with fixed bed and fluidized bed processes experiencing improved margins, while natural gas-based production faced losses [3]. Market Demand Dynamics - Agricultural demand for urea is expected to decline in July due to the seasonal off-peak period, with a potential rebound in August and September driven by fall fertilization and export activities [1][7]. - The overall agricultural demand is supported by the ongoing construction of high-standard farmland, which is projected to increase urea consumption [7][8]. - Industrial demand for urea, particularly from melamine and urea-formaldehyde resin sectors, remains stagnant due to weak real estate market conditions and export challenges [9]. Inventory and Export Policies - Urea port inventories have been rising since May 2025, with expectations of continued accumulation in the third quarter, influenced by export policies and market conditions [10][11]. - The export policy for urea has been clarified, with a total export quota of 2 million tons set for May to October 2025, which may help alleviate some supply pressures [11][12]. Seasonal Trends and Future Outlook - The second half of 2025 is characterized by seasonal demand fluctuations, with expectations of lower production utilization rates due to the agricultural off-season and potential winter heating demands impacting natural gas supply [6][12]. - Overall, the urea market is anticipated to remain oversupplied, with price pressures expected to persist unless significant changes occur in export policies or seasonal storage strategies [13].

Group 1: Investment Rating - No investment rating information is provided in the report. Group 2: Core Views - The recent urea futures market has rebounded. Although international urea prices remain strong, China's second - batch export quota of 120,000 tons is significantly lower than the first batch of 200,000 tons, falling short of expectations. The domestic supply shows high daily production and operating rates, and inventories have increased again. On the demand side, the operating rates of compound fertilizers and melamine in industrial demand have continued to decline, and agricultural demand has weakened again. The overall domestic urea market has an obvious oversupply situation, and the export policy has not been more liberal than expected. The spot price of the delivery product is 1710 (-20), and the overall fundamentals are bearish. It is expected that the UR contract will move in a volatile manner today [4]. Group 3: Summary by Relevant Catalogs Urea Overview - **Fundamentals**: The domestic urea market has an obvious oversupply situation. The second - batch export quota is lower than expected, industrial and agricultural demands are weak, and the spot price of the delivery product is 1710 (-20), with overall bearish fundamentals [4]. - **Basis**: The basis of the UR2509 contract is - 102, and the premium - discount ratio is - 6.0%, which is bearish [4]. - **Inventory**: The UR comprehensive inventory is 1.422 million tons (+182,000 tons), which is bearish [4]. - **Futures Chart**: The 20 - day moving average of the UR main contract is upward, and the closing price is above the 20 - day line, which is bullish [4]. - **Main Position**: The net long position of the UR main contract has increased, which is bullish [4]. - **Expectation**: The main urea contract has rebounded, international prices are strong, but the export quota is lower than expected, and the domestic market has an obvious oversupply situation. It is expected that the UR contract will move in a volatile manner today [4]. - **Leverage Factors**: Bullish factors include strong international prices; bearish factors include high operating rates and daily production, weak domestic demand, and the export quota falling short of expectations. The main logic lies in international prices and marginal changes in domestic demand [5]. Spot and Futures Market | Category | Details | | --- | --- | | **Spot Market** | The price of the spot delivery product is 1710 (-20), Shandong spot is 1710 (-30), Henan spot is 1720 (-5), and FOB China is 2548 [6]. | | **Futures Market** | The prices of UR01, UR05, and UR09 are 1780 (+60), 1787 (+56), and 1812 (+67) respectively, and the basis of the UR09 contract is - 102 (-87) [6]. | | **Inventory** | The UR comprehensive inventory is 1.422 million tons (+182,000 tons), the UR factory inventory is 1.177 million tons (+142,000 tons), and the UR port inventory is 245,000 tons (+40,000 tons) [6]. | Supply - Demand Balance Sheet | Year | Capacity | Capacity Growth Rate | Production | Net Imports | Import Dependence | Apparent Consumption | Ending Inventory | Actual Consumption | Consumption Growth Rate | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2018 | | 2245.5 | | 1956.81 | 18.6% | 2405.19 | 23.66 | 2405.19 | | | 2019 | | 2445.5 | 8.9% | 2240 | 17.9% | 2727.94 | 37.86 | 2713.74 | 12.8% | | 2020 | | 2825.5 | 15.5% | 2580.98 | 19.3% | 3200.1 | 37.83 | 3200.13 | 17.9% | | 2021 | | 3148.5 | 11.4% | 2927.99 | 10.7% | 3280.4 | 35.72 | 3282.51 | 2.6% | | 2022 | | 3413.5 | 8.4% | 2965.46 | 10.2% | 3300.83 | 44.62 | 3291.93 | 0.3% | | 2023 | | 3893.5 | 14.1% | 3193.59 | 8.4% | 3486.72 | 44.65 | 3486.69 | 5.9% | | 2024 | | 4418.5 | 13.5% | 3425 | 9.5% | 3785 | 51.4 | 3778.25 | 8.4% | | 2025E | | 4906 | 11.0% | | | | | | | [10] |

Core Viewpoint - The urea market in the second half of 2025 will be influenced by a mix of supply and demand factors, with export policies playing a crucial role [1] Supply Factors - In the first half of 2025, approximately 3.5 million tons of new urea production capacity will be added, leading to a long-term daily output exceeding 200,000 tons [1] - An additional 2.8 million tons of new capacity is planned for the second half, with daily output expected to surpass 210,000 tons after September [1] - By the end of the year, total production capacity is projected to increase by 6.35 million tons, an 8.22% year-on-year growth, with total output anticipated to reach 70 million tons, reflecting an 8.14% year-on-year increase [1] Demand Factors - Agricultural demand remains strong in the first half of the year, with consumption growth of 8.89% from January to May, despite some seasonal fluctuations [1] - In the second half, both agricultural and industrial demand are expected to weaken, leading to a noticeable decline in consumption growth, with an annual increase forecasted at 4.5% to 5% [1] - Total consumption is estimated to be between 63.43 million and 63.73 million tons, which is lower than the projected production [1] Export and International Market - High uncertainty in the global market affects urea costs, production, and transportation [1] - The potential easing of export policies and the resumption of supply to India will significantly impact the export landscape and market sentiment [1] - If no policy changes occur, exports are unlikely to affect domestic supply and demand, but market sentiment may still be influenced by policy dynamics [1] Inventory and Cost Factors - High inventory levels were maintained in the first half of the year, with a seasonal accumulation observed from April to June [1] - The second half is expected to see continued high inventory pressure due to increased production capacity and weakened domestic demand, posing a risk of further accumulation [1] - Coal prices have decreased, reducing cost support for urea, with coal costs down by 110 to 130 yuan per ton compared to the end of last year [1] Market Outlook - The urea market in the second half of 2025 will face multiple pressures, but there are also supporting factors such as potential easing of export policies [1] - If export policies are unexpectedly relaxed, spot prices may approach the highs seen in the first half; if policies remain unchanged or tighten, the market will revert to being driven by domestic supply and demand, putting pressure on prices [1] - Price forecasts suggest that without unexpected contradictions, urea futures prices will trend lower, fluctuating within a range of 1,500 ± 100 yuan per ton for the low end and 1,800 to 1,850 yuan per ton for the high end [1]

Report Industry Investment Rating - Not provided Core View of the Report - The recent rumors of looser urea export policies and the release of a new round of Indian tenders have boosted market sentiment. From the perspective of urea demand, June - July is still the peak season for top - dressing corn in the north, and the loosening of export policies and price drops will stimulate speculative demand. Therefore, the demand for urea in the next two months is expected to be good. Wait for the spot price to fall and stabilize before looking for long - position opportunities [1] Summary by Related Catalogs 1. Price Changes - Urea futures prices: UR01 closed at 1684 yuan/ton on June 27, up 2 yuan (0.12%) from June 26; UR05 closed at 1696 yuan/ton, up 5 yuan (0.30%); UR09 closed at 1717 yuan/ton, down 7 yuan (- 0.41%); Shandong spot price was 1810 yuan/ton, up 10 yuan (0.56%) [1] - Domestic small - particle urea spot prices: In Shanxi, it was 1660 yuan/ton on June 27, up 10 yuan (0.61%); in Henan and Hebei, it remained at 1800 yuan/ton; in the Northeast, it was 1890 yuan/ton; in Jiangsu, it was 1820 yuan/ton, up 10 yuan (0.55%) [1] - Upstream costs: Anthracite prices in Henan and Shanxi remained unchanged at 1080 yuan/ton and 820 yuan/ton respectively [1] - Downstream prices: The price of 45%S compound fertilizer in Shandong and Henan remained at 2930 yuan/ton and 2520 yuan/ton respectively; the price of melamine in Shandong and Jiangsu remained at 5083 yuan/ton and 5300 yuan/ton respectively [1] 2. Basis and Spread - The basis of Shandong spot - UR was 114 yuan/ton on June 27, up 5 yuan from June 26 [1] - The spread of 01 - 05 was - 12 yuan/ton on June 27, down 3 yuan from June 26 [1] 3. Important Information - On the previous trading day, the urea futures main contract 2509 opened at 1735 yuan/ton, with a high of 1740 yuan/ton, a low of 1712 yuan/ton, closed at 1717 yuan/ton, and the settlement price was 1723 yuan/ton. The position of 2509 was 222,536 lots [1] 4. Trading Strategy - Wait for the spot price to fall and stabilize before looking for long - position opportunities in urea futures, but be aware of the risk of changes in export policies [1]

Core Viewpoint - After a period of continuous decline, international urea prices surged due to geopolitical factors, making domestic exports possible and leading to a significant rebound in the market. However, with domestic export quotas nearly exhausted and weak domestic demand, urea prices have shown a notable decline again. Long-term, the oversupply situation in the domestic market has not fundamentally changed, and future policy adjustments will need to be monitored [1]. Supply Situation - Supply remains at a high level, with the urea industry entering a new capacity expansion cycle in 2025, expected to add nearly 7 million tons of production capacity throughout the year. New production facilities have been launched in the first half of the year, and while daily production has slightly decreased, it still operates at a high level compared to the previous year. As of May 20, daily urea production was 196,000 tons, an increase of 14,000 tons year-on-year. Additional new facilities are expected to come online in the second half of the year, indicating a continued loose supply situation [4][2]. Demand Dynamics - Demand for urea is expected to increase in 2025, primarily driven by the compound fertilizer industry, melamine industry, and agricultural sector. It is estimated that the compound fertilizer sector will add 5.1 million tons of new capacity, translating to an increase in urea demand of 810,000 tons. The agricultural sector is also expected to see a rise in urea application due to advanced farming techniques. However, the total increase in urea demand for the year is projected to be around 3 million tons, which is significantly lower than the anticipated increase in production capacity. In the short term, demand is notably weak, with the compound fertilizer production for summer nearing completion and other industrial demands also showing weakness [5][4]. Policy Impact - Future policy changes will be crucial in influencing the urea market. Recent surges in international urea prices have exceeded China's previous export limit, making exports feasible. The first batch of 2 million tons of export quotas has been nearly fully allocated, with shipments expected in July and August. The announcement of new export quotas remains pending, and whether these quotas will increase is a key factor affecting the short-term market. If an additional 2 million tons of export quotas are released, it could lead to a significant reduction in inventory by 2025, potentially creating a more optimistic outlook for urea prices. Conversely, if no further export quotas are issued, prices may continue to decline [6][5].

Core Viewpoint - Recent fluctuations in urea futures prices have shown a significant rebound followed by a rapid decline, with the main contract closing at 1711 yuan/ton, down 2% and nearly 100 yuan/ton lower than the previous high of 1800 yuan/ton [1] Group 1: Price Movements - Urea futures prices have experienced a sharp drop after a significant rebound, with the main contract closing at 1711 yuan/ton [1] - Domestic urea spot prices have also decreased, with some regions seeing price reductions of 10 to 50 yuan/ton, and mainstream small particle prices ranging from 1680 to 1800 yuan/ton [1] - Market sentiment is cautious, with high-level transactions facing resistance and traders eager to liquidate, leading to noticeable price declines [1] Group 2: Market Analysis - Analysts attribute the recent price volatility to two main factors: improved export conditions due to disruptions in Iranian production and lower-than-expected Indian urea tender volumes, which have driven prices up [3] - The expectation of relaxed domestic export policies has also contributed to price increases, but subsequent supply chain improvements have not materialized, leading to downward pressure on prices [3] - Urea production remains high, with potential increases in daily output and nearly 200 million tons of new production capacity expected to be released from July to October [4] Group 3: Future Outlook - The long-term outlook suggests that urea prices may stabilize at lower levels due to ongoing production profitability and reduced agricultural demand in the second half of the year [5] - The key variable affecting future prices will be the timing and volume of any further relaxation of export policies [5] - Analysts believe that urea prices are currently constrained by supply-demand dynamics and export policy impacts, with limited upward potential but some support from potential policy changes [5]

1. Report Industry Investment Rating - The investment rating for the urea industry is "Range-bound" [1] 2. Core Viewpoints of the Report - Urea is expected to remain range - bound in the short term, with fundamental pressure in the medium term. The upside is limited due to the gentle release of domestic top - dressing demand, high inventory of mid - stream traders, and the export policy that curbs speculation. The downside is supported by the opening of the export channel. In the long - run, with an assumed export volume of around 2 million tons, the pressure on urea remains high, and the price center may gradually decline, but there may be multi - stage price rebounds due to export releases [4] 3. Summary by Relevant Catalogs 3.1 Urea Fundamental Data 3.1.1 Futures Market - Urea主力: Closing price was 1,761 yuan/ton (down 12 from the previous day), settlement price was 1,774 yuan/ton (down 4), trading volume was 178,534 lots, open interest was 231,078 lots (up 5,951), and the number of warehouse receipts was 6,619 tons (down 235). The turnover was 633.582 million yuan (down 56.772 million) [2] - Basis: Shandong region basis was 109 (up 12), Fengxi - disk was - 31 (up 12), and Dongguang - disk was 69 (up 12) [2] - Month spread: UR09 - UR01 was 65 (down 5) [2] 3.1.2 Spot Market - Urea factory prices of Henan Xinlianxin, Yankuang Xinjiang, Shandong Ruixing, Shanxi Fengxi, Hebei Dongguang, and Jiangsu Linggu remained unchanged at 1,860 yuan/ton, 1,660 yuan/ton, 1,840 yuan/ton, 1,730 yuan/ton, 1,830 yuan/ton, and 1,880 yuan/ton respectively. Trader prices in Shandong and Shanxi regions also remained unchanged at 1,870 yuan/ton and 1,730 yuan/ton respectively [2] - Supply - side indicators: The operating rate was 90.16% (up 0.57 percentage points), and the daily output was 207,310 tons (up 1,300) [2] 3.2 Industry News - As of May 28, 2025, the total inventory of Chinese urea enterprises was 980,600 tons, an increase of 63,200 tons (6.89% YoY) from the previous week. The inventory is expected to continue rising this week due to weakened speculative trading by traders [2]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The overall fundamentals of urea are bearish, with high supply and weak demand in the short term. The export policy has been implemented, and although the export profit is high, it has little impact on domestic prices. It is expected that the trend of UR today will be oscillating weakly [4]. Summary by Related Catalogs Urea Overview - **Fundamentals**: The urea futures market has declined recently. Supply-side factors include high operating rates and daily production, with new plants coming into operation and short-term inventory fluctuations. On the demand side, the operating rate of compound fertilizers in industrial demand has declined, while that of melamine is relatively high, and agricultural demand is weak in the short term. The international urea price is strong, and the export policy has been implemented, resulting in high export profits but little impact on domestic prices. The spot price of the deliverable product is 1860 (+0), and the overall fundamentals are bearish [4]. - **Basis**: The basis of the UR2509 contract is 76, with a premium/discount ratio of 4.1%, which is bullish [4]. - **Inventory**: The comprehensive UR inventory is 1.114 million tons (+0), which is bearish [4]. - **Futures Market**: The 20-day moving average of the UR main contract is upward, but the closing price is below the 20-day moving average, indicating a neutral position [4]. - **Main Position**: The net long position of the UR main contract has reversed to a long position, which is bullish [4]. - **Expectation**: The futures price of the urea main contract has declined, with high daily production, short-term inventory fluctuations, weak agricultural demand in the short term, and price decline after the implementation of the export policy. It is expected that the trend of UR today will be oscillating weakly [4]. Factors Affecting Urea Price - **Bullish Factors**: The theoretical export profit is high [5]. - **Bearish Factors**: High daily production and operation rates, new plant commissioning, and overall weak demand [5]. - **Main Logic**: High daily production on the supply side and marginal changes in demand [5]. Spot and Futures Market Quotes - **Spot Market**: The price of the deliverable product is 1860 (+0), the price of Shandong spot is 1880 (+0), the price of Henan spot is 1860 (+0), and the FOB China price is 2592 [6]. - **Futures Market**: The prices of UR01, UR05, and UR09 contracts have all declined, with decreases of 8, 8, and 6 respectively [6]. Urea Supply and Demand Balance Sheet - **2018 - 2024**: From 2018 to 2024, the urea production capacity, output, and apparent consumption have generally shown an upward trend. The import dependence has fluctuated, and the consumption growth rate has also varied. The ending inventory has remained relatively stable [10]. - **2025E**: The production capacity is expected to reach 4906, with a growth rate of 11.0% [10].

Group 1: Investment Rating - No investment rating information is provided in the report. Group 2: Core Views - The export policy for urea is relatively mild, and the market will enter a volatile pattern in the medium term [1]. - The urea futures market is expected to show a pattern of long - short game and oscillation, with support at the bottom and limited upside space due to policy control [3]. - Next week, the inventory of urea production enterprises is expected to continue to decline [2]. Group 3: Summary of Related Catalogs Fundamental Tracking - **Futures Market**: The closing price of the urea main contract (09 contract) remained unchanged at 1,897 yuan/ton, the settlement price increased by 12 yuan/ton to 1,903 yuan/ton, the trading volume increased by 33,071 hands to 299,239 hands, the open interest increased by 8,127 hands to 275,098 hands, the number of warehouse receipts increased by 2,149 tons to 7,049 tons, and the trading volume increased by 131,731 ten - thousand yuan to 1,138,628 ten - thousand yuan. The Shandong regional basis increased by 10 to 83, and the UR09 - UR01 spread increased by 3 to 99 [1]. - **Spot Market**: The factory prices of major urea manufacturers remained unchanged. The trading price in Shandong increased by 10 yuan/ton to 1,980 yuan/ton, and the price in Shanxi remained unchanged at 1,890 yuan/ton. The supply - side operating rate decreased by 1.04 percentage points to 85.50%, and the daily output decreased by 2,400 tons to 197,170 tons [1]. Industry News - As of May 7, 2025, the total inventory of Chinese urea enterprises was 1.0656 million tons, a decrease of 0.1261 million tons from the previous week, a week - on - week decrease of 10.58%. The inventory of some provinces increased, while that of most provinces decreased. Due to strong short - term speculative behavior of traders, the inventory of urea production enterprises is expected to continue to decline next week [2]. - The export policy has been temporarily implemented. The self - regulated export volume of urea by relevant associations this year (until April 2026) is about 2 million tons, and the export rhythm and time are adjusted to ensure domestic market stability and prevent excessive concentration of exports [3]. Trend Intensity - The trend intensity of urea is 0, indicating a neutral trend [3].