Report Summary 1. Report Industry Investment Rating No investment rating for the industry is provided in the report. 2. Core View The current sentiment of urea has improved, but the reversal may not have arrived from the supply - demand perspective. The current urea valuation is at a relatively low level, reflecting the pattern of strong supply and weak demand. There is insufficient short - term upward drive, and it is necessary to focus on the old device renovation of the chemical industry on the supply side and new export quota issuance [1]. 3. Summary by Relevant Catalogs 3.1 Price Changes - **Futures Prices**: UR01 urea futures price in Shanxi decreased from 1640.00 yuan/ton on October 27th to 1635.00 yuan/ton on October 28th, a decrease of 0.30%. UR05 decreased from 1713.00 yuan/ton to 1708.00 yuan/ton, a decrease of 0.29%. UR09 decreased from 1745.00 yuan/ton to 1736.00 yuan/ton, a decrease of 0.52% [1]. - **Spot Prices**: Domestic spot prices in Shandong, Henan, and Hebei remained unchanged. The price in Northeast China increased from 1600.00 yuan/ton to 1610.00 yuan/ton, an increase of 0.63%. The price in Jiangsu decreased from 1610.00 yuan/ton to 1600.00 yuan/ton, a decrease of 0.62% [1]. - **Upstream and Downstream Prices**: The prices of anthracite coal in Henan and Shanxi remained unchanged. The prices of compound fertilizer in Shandong and Henan remained unchanged. The price of melamine in Shandong remained unchanged, while that in Jiangsu increased from 5100.00 yuan/ton to 5150.00 yuan/ton, an increase of 0.98% [1]. 3.2 Basis and Spread - The basis of Shandong spot - UR increased from - 103.00 yuan/ton to - 98.00 yuan/ton, an increase of 5.00 yuan/ton. The spread of 01 - 05 remained unchanged at - 73.00 yuan/ton [1]. 3.3 Important Information - The opening price of the main contract 2601 of urea futures was 1636 yuan/ton, the highest price was 1645 yuan/ton, the lowest price was 1626 yuan/ton, the closing price was 1635 yuan/ton, and the settlement price was 1635 yuan/ton. The trading volume was 273001 lots [1]. 3.4 Trading Strategy - It is recommended to continue holding the previously sold out - of - the - money put options (view score: 0) [1].

Group 1: Report Industry Investment Rating - No information provided Group 2: Report's Core View - The current sentiment of urea has improved, but the reversal may not have arrived from the supply - demand perspective. The current futures market is mainly driven by short - position holders taking profit. It is recommended to continue holding previously sold out - of - the - money put options. The current urea valuation is relatively low, reflecting the pattern of strong supply and weak demand. If prices continue to fall, it may lead to a further decline in upstream production willingness and accelerate the industry's self - clearing. In the short term, there is insufficient upward driving force for urea, and the subsequent possible driving factors are the old device renovation in the chemical industry on the supply side and the issuance of new export quotas [1] Group 3: Summary by Relevant Catalogs Urea Futures Prices - UR01 closed at 1640.00 yuan/ton on October 27, down 2.00 yuan (-0.12%) from October 24. UR05 closed at 1713.00 yuan/ton, down 6.00 yuan (-0.35%). UR09 closed at 1745.00 yuan/ton, down 3.00 yuan (-0.17%) [1] Domestic Spot Prices (Small Granules) - In Shandong, the price was 1610.00 yuan/ton on October 27, up 40.00 yuan (2.55%) from October 24. In Henan, it was 1590.00 yuan/ton, up 20.00 yuan (1.27%). In Hebei, it was 1630.00 yuan/ton, up 30.00 yuan (1.88%). In Jiangsu, it was 1610.00 yuan/ton, up 40.00 yuan (2.55%). Prices in Shanxi and Northeast remained unchanged [1] Basis and Spread - The basis of Shandong spot - UR was - 103.00 yuan/ton on October 27, up 46.00 yuan from October 24. The spread of 01 - 05 was - 73.00 yuan/ton, up 4.00 yuan [1] Upstream Costs - The anthracite coal prices in Henan and Shanxi remained unchanged at 1030.00 yuan/ton and 880.00 yuan/ton respectively [1] Downstream Prices - The prices of compound fertilizer (45%S) in Shandong and Henan remained unchanged at 2900.00 yuan/ton and 2500.00 yuan/ton respectively. The melamine price in Shandong was 5084.00 yuan/ton on October 27, up 34.00 yuan (0.67%) from October 24, while the price in Jiangsu remained unchanged [1] Important Information - The opening price of the urea futures main contract 2601 was 1647 yuan/ton, the highest price was 1655 yuan/ton, the lowest price was 1635 yuan/ton, and the closing price was 1640 yuan/ton with a settlement price of 1641 yuan/ton. The position volume was 281954 lots [1] Trading Strategy - Hold the sold out - of - the - money put options (Viewpoint score: 0) [1]