Report Industry Investment Rating - Not provided Core Viewpoint of the Report - The fundamentals of urea are weakening, and the market support relies on export containerization. In the game between weak reality and strong expectations, the market is expected to be volatile and weak in the short term, and attention should be paid to news disturbances [1] Summary by Relevant Catalogs Strategy Analysis - The urea futures market opened low and moved high, with a strong intraday oscillation. Yesterday, upstream factories reduced prices to attract orders, and the order intake improved. Today, factory quotes vary. The daily urea production fluctuates around 200,000 tons. In the future, factory equipment will be put back into production, and new production capacity will be gradually launched, so the supply pressure is difficult to relieve in the short term. However, the market expects seasonal urea production cuts. The northern agricultural demand is near the end, and after the urea futures market weakened, the downstream purchasing enthusiasm declined, mainly for rigid demand. After compound fertilizer factories started autumn fertilizer production, the operating load increased slightly, but due to the main form of advance payment, the finished product inventory in the factory increased, and the demand for urea was elastic, with limited demand support. The inventory continued to decline this period, mainly due to regional agricultural demand purchases and export orders from export enterprises being shipped to ports, but the inventory decline rate slowed down month-on-month [1] Futures and Spot Market Conditions - **Futures**: The main urea 2509 contract opened at 1,733 yuan/ton, moved high, and oscillated strongly intraday, finally closing at 1,743 yuan/ton, up 0.52%. The trading volume was 198,012 lots (+379 lots). Among the top twenty main positions, long positions decreased by 1,363 lots, and short positions increased by 2,238 lots. Dongzheng Futures' net long positions increased by 1,902 lots, and Hongyuan Futures' net long positions increased by 411 lots; Guotai Junan's net short positions increased by 1,368 lots, and Zhongtai Futures' net short positions increased by 2,112 lots [2] - **Spot**: Yesterday, upstream factories reduced prices to attract orders, and the order intake improved. Today, factory quotes vary. The ex-factory prices of small-grain urea from urea factories in Shandong, Henan, and Hebei are mostly in the range of 1,730 - 1,770 yuan/ton, with a few factories quoting slightly higher [4] Warehouse Receipts - On July 17, 2025, the number of urea warehouse receipts was 2,630, the same as the previous trading day [3] Fundamental Tracking - **Basis**: Today, the mainstream spot market quotes were stable, and the futures closing price rose. Based on Shandong region, the basis weakened compared to the previous trading day, and the basis of the September contract was 57 yuan/ton (-20 yuan/ton) [8] - **Supply Data**: According to Feiyitong data, on July 17, 2025, the national daily urea production was 196,700 tons, the same as yesterday, and the operating rate was 83.75% [11] - **Downstream Data**: From July 11 to July 17, the utilization rate of compound fertilizer production capacity was 32.55%, an increase of 2.72 percentage points from last week. The weekly average utilization rate of China's melamine production capacity was 62.56%, a decrease of 0.22 percentage points from last week [12]