Report Summary 1) Report Industry Investment Rating No industry investment rating is provided in the report. 2) Core View of the Report The report believes that the current urea is undervalued, but the upward driving force is temporarily limited. It is recommended to sell out - of - the - money put options to earn time value. The current urea valuation is at a relatively low level, reflecting the situation of strong supply and weak demand. The spot price in Shanxi has temporarily stabilized after hitting a five - year low of 1450 yuan/ton. Upstream enterprises are already suffering losses, and further price drops may reduce their willingness to start production. In the short term, the upward driving force for urea is insufficient due to large supply and inventory pressure, with downstream enterprises mainly replenishing inventory cautiously at low prices. Possible future driving forces include the expectation of the renovation of old chemical plants on the supply side and the issuance of new export quotas [1]. 3) Summary by Related Catalogs Price Changes - **Futures Prices**: On October 23, UR01 in Shandong was 1638 yuan/ton (up 17 yuan from the 22nd), in Shanxi was 1550 yuan/ton (up 10 yuan), and in Henan was 1550 yuan/ton (up 10 yuan). UR05 was 1710 yuan/ton (up 19 yuan, 1.12%), and UR09 was 1740 yuan/ton (up 15 yuan, 0.87%) [1]. - **Spot Prices**: In the domestic small - particle spot market, prices in Hebei were 1590 yuan/ton (up 10 yuan, 0.63%), in the Northeast were 1600 yuan/ton (unchanged), and in Jiangsu were 1550 yuan/ton (up 10 yuan, 0.65%) [1]. - **Cost and Downstream Prices**: The price of anthracite in Henan and Shanxi remained unchanged at 1030 yuan/ton and 880 yuan/ton respectively. The price of compound fertilizer (45%S) in Shandong was 2900 yuan/ton, and the price of phosphate fertilizer was 2500 yuan/ton, both unchanged. The price of melamine in Shandong was 5050 yuan/ton (down 17 yuan, - 0.34%), and in Jiangsu was 5100 yuan/ton (unchanged) [1]. Important Information The opening price of the main urea futures contract 2601 was 1628 yuan/ton, the highest price was 1640 yuan/ton, the lowest price was 1619 yuan/ton, the closing price was 1638 yuan/ton, and the settlement price was 1630 yuan/ton. The trading volume was 298,840 lots [1]. Trading Strategy The recommended trading strategy is to sell out - of - the - money put options [1].

Report Summary 1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core View The report believes that current urea is undervalued, but the upward driving force is temporarily limited. It is recommended to sell out - of - the - money put options to earn time value. The current urea valuation is relatively low, reflecting the situation of strong supply and weak demand. The spot price in Shanxi has reached a near - five - year low and stabilized. Upstream enterprises are already suffering losses, and further price drops may reduce upstream production willingness. In the short term, the upward driving force is insufficient due to large supply and inventory pressure, and downstream buyers mainly replenish stocks cautiously at low prices. The potential driving forces to watch are the renovation of old chemical equipment on the supply side and the issuance of new export quotas [1]. 3. Summary by Related Catalogs Urea Futures and Spot Prices - **Futures Prices**: On October 21, UR01 closed at 1609 yuan/ton (up 9 yuan or 0.56% from the previous day), UR05 at 1682 yuan/ton (up 7 yuan or 0.42%), and UR09 at 1719 yuan/ton (up 11 yuan or 0.64%) [1]. - **Spot Prices**: In domestic markets, prices in Shandong, Henan and Jiangsu decreased by 10 yuan/ton (-0.65%, -0.65% and -0.64% respectively), and in the Northeast by 20 yuan/ton (-1.23%), while the price in Hebei remained unchanged [1]. Basis and Spread - The basis of Shandong spot - UR was -142 yuan/ton on October 21, down 17 yuan from the previous day. The 01 - 05 spread was -73 yuan/ton, up 2 yuan [1]. Upstream and Downstream Prices - **Upstream**: The prices of anthracite coal in Henan and Shanxi remained unchanged at 1030 yuan/ton and 880 yuan/ton respectively [1]. - **Downstream**: The prices of compound fertilizer (45%S) in Shandong and Henan, and melamine in Shandong and Jiangsu all remained unchanged [1]. Important Information The opening price of the main urea futures contract 2601 was 1597 yuan/ton, the highest was 1622 yuan/ton, the lowest was 1596 yuan/ton, the closing price was 1609 yuan/ton, and the settlement price was 1611 yuan/ton. The position volume was 312,167 lots [1]. Trading Strategy Sell out - of - the - money put options [1].