Market Sentiment - The urea futures contract 2509 saw a significant increase of over 7% before the Labor Day holiday, boosting market sentiment [1] - Following the holiday, the contract continued its upward trend, reaching 1926 CNY/ton on May 9 [1] - The market sentiment is primarily driven by expectations of relaxed export policies, leading to a notable rise in spot prices in Henan [2] Price Movements - On the last trading day before the holiday, the main spot price in Henan was 1860 CNY/ton, up 40 CNY/ton or 2.2% from the previous day [2] - By May 7, the price further increased to 1900 CNY/ton, and on May 9, it reached 1910 CNY/ton [2] - The urea 2509 contract recorded a weekly increase of 2.05% as of May 9 [2] Supply and Demand Dynamics - Urea production capacity utilization reached 89.21% before the holiday, with a daily output of 205,700 tons [4] - Despite a slight decrease in supply post-holiday due to maintenance, the overall production remains high, with weekly output at 1.41 million tons, up 0.93 thousand tons from the end of April [4] - Agricultural demand is expected to improve, particularly in the Yellow River and Huaihai regions, with preparations for summer corn fertilizer underway [3] Cost Factors - The cost of urea is influenced by declining coal prices, which have dropped over 3% during the holiday week, leading to a decrease in production costs [5] - The high inventory levels and increased supply from coal mines are expected to keep coal prices under pressure, which may weaken support for urea prices [5] Profitability and Future Outlook - With decreasing costs, urea producers are likely to see improved profit margins, which may lead to higher operational activity and increased market supply [6] - In the short term, prices may remain stable due to positive sentiment from export policy expectations and improving demand [6] - However, in the medium to long term, high supply levels and limited demand support may restrict further price increases [6]