1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - This week, the domestic urea spot market price showed a stable and slightly weak trend. The urea daily production is expected to fluctuate around 20.7 - 21.7 tons, and with the concentrated release of off - season storage goods in March, the overall urea supply is relatively sufficient. The agricultural demand is gradually weakening, while the industrial demand is marginally rising. The upstream urea enterprise inventory is continuously decreasing. The coal price is running weakly, and the urea profit has increased month - on - month. The 5 - 9 spread is weak, and the 05 basis is strengthening. Affected by factors such as the concentrated release of off - season storage goods, the phased weakening of agricultural demand, and the tightening of fertilizer export policies, the urea market shows a pattern of strong supply and weak demand in the short term. The futures price may continue to consolidate at a high level. The operation range of the urea 2605 contract is expected to be between 1780 - 1950 yuan/ton [4]. 3. Summary According to the Directory 3.1 Week - ly View Summary - **Supply**: High daily production combined with the release of off - season storage goods makes the supply relatively sufficient. The weekly urea production is 151.94 tons (-1.18%), with an average daily production of 21.7 tons. Some enterprises have planned maintenance in the future [4][21]. - **Demand**: Agricultural demand is weakening, while industrial demand is marginally rising. The compound fertilizer enterprise operating rate is 49.97% (month - on - month +4.41%), and the finished product inventory is 73.38 tons (month - on - month - 1.51 tons). The melamine operating rate is 59.31% (+5.96%) [4][34]. - **Inventory**: The upstream urea enterprise inventory is continuously decreasing. The urea enterprise inventory is 80.89 tons, a month - on - month decrease of 14.87 tons. The port inventory is 16.7 tons (month - on - month - 2.2 tons). The mainstream pre - collection days of urea enterprises are 8.29 days (month - on - month +0.23 days) [31]. - **Cost and Profit**: The coal price is running weakly, and the urea profit has increased month - on - month [4]. - **Basis and Spread**: The 5 - 9 spread is weak, and the 05 basis is strengthening [4]. - **Overall Logic**: Affected by factors such as the concentrated release of off - season storage goods, the phased weakening of agricultural demand, and the tightening of fertilizer export policies, the short - term urea market shows a pattern of strong supply and weak demand. The futures price may continue to consolidate at a high level. The operation range of the urea 2605 contract is expected to be between 1780 - 1950 yuan/ton [4]. 3.2 Variety Details Decomposition - **Domestic Urea Market Price**: The domestic urea market price showed a stable and slightly weak trend this week [6]. - **International Urea Price**: The international urea price has risen significantly [11]. - **Supply**: High daily production combined with the release of off - season storage goods makes the supply relatively sufficient. The weekly urea production is 151.94 tons (-1.18%), with an average daily production of 21.7 tons. Some enterprises have planned maintenance in the future [17][21]. - **Inventory**: The upstream urea enterprise inventory is continuously decreasing. The urea enterprise inventory is 80.89 tons, a month - on - month decrease of 14.87 tons. The port inventory is 16.7 tons (month - on - month - 2.2 tons). The mainstream pre - collection days of urea enterprises are 8.29 days (month - on - month +0.23 days) [27][31]. - **Demand**: Agricultural demand is weakening, while industrial demand is marginally rising. The compound fertilizer enterprise operating rate is 49.97% (month - on - month +4.41%), and the finished product inventory is 73.38 tons (month - on - month - 1.51 tons). The melamine operating rate is 59.31% (+5.96%) [33][34]. - **Raw Material End**: The coal price is running weakly [36]. - **Urea - related Product Spread**: Not detailed in the given content, only the topic is mentioned [47].

Summary of Key Points from Conference Call on Urea Market Impact Due to Middle East Conflict Industry Overview - The conference call discusses the global urea market, particularly focusing on the impact of the ongoing Middle East conflict on supply and pricing dynamics in the urea industry. Core Insights and Arguments 1. **Supply Disruption**: The Middle East conflict has led to a significant disruption in global urea supply, with production halts in Iran and Qatar affecting approximately 17 million tons of maritime volume, accounting for 32% of global trade [1][3]. 2. **Price Surge**: International urea prices have increased by $200-$250 per ton within two weeks of the conflict, with potential for prices to exceed historical highs if production continues to be affected [1][2]. 3. **India's Role**: India, a major urea importer, has seen its domestic inventory rise to 620 million tons, but production has been impacted by gas supply disruptions from Qatar, leading to a monthly loss of 80,000 tons [1][4][7]. 4. **Export Restrictions**: China has tightened regulations on urea exports, halting nitrogen-potassium mixed fertilizer and small package urea exports, with low probability of lifting export quotas before the spring farming season ends [1][5]. 5. **Market Dynamics**: The domestic market is experiencing tightness due to speculative trading in futures, leading to a perceived supply shortage despite an expected surplus of 10 million tons in 2026 [1][12]. 6. **Future Price Drivers**: Key factors that may drive urea prices higher include potential new bidding activities from India and the operational status of Middle Eastern urea plants, which may face production cuts due to storage issues [9][16]. Additional Important Content 1. **Impact on Global Trade Flows**: The conflict has altered global urea trade flows, with Middle Eastern exports severely restricted, particularly through the Strait of Hormuz, affecting supply to various regions [3][21]. 2. **Regional Demand Variations**: The demand for urea is strong in Europe and the U.S. due to the spring planting season, while Brazil's demand is currently weak [2][14]. 3. **Long-term Supply Concerns**: The ongoing conflict may lead to permanent supply losses, making it difficult for prices to return to previous levels even after the conflict subsides [24]. 4. **Potential for Strategic Material Classification**: There is speculation that urea may be classified as a strategic material, leading to tighter export controls and concentration of export rights among a few state-owned enterprises [12]. 5. **Regional Variability in Impact**: Different regions will experience varying impacts from the supply disruptions, with Southeast Asia, particularly Thailand, expected to be significantly affected due to high dependency on Middle Eastern imports [19]. This summary encapsulates the critical insights and implications of the ongoing Middle East conflict on the urea market, highlighting the interplay between supply disruptions, pricing dynamics, and regional demand variations.

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - Last week's view was that the guiding price suppressed the spot market, which remained stable. This week's view is that due to policy pressure, urea will mainly fluctuate. The ex - factory prices in mainstream regions have been firm since the weekend, with stable market sentiment and average trading volume. Urea enterprises have received few orders. In Shandong, the ex - factory price is expected to remain firm; in Henan, although the market sentiment has cooled and the order - receiving volume has declined, the ex - factory price is also expected to be firm. In the areas around the delivery zone, the ex - factory price is expected to remain stable. The daily output of urea has increased to around 223,000 tons, and the supply has reached a new high. The international market price is firm, and India has tendered for 150 million tons again, with an expected price of no less than $500 per ton. However, there are no new quotas in China, so the overall impact is limited. The operating rates of compound fertilizer plants in the Central Plains and Northeast regions have gradually increased, but they mainly make rigid - demand purchases. After a significant inventory build - up during the Spring Festival, urea enterprises' inventories have started to decline slightly this week. With the continuous rise in prices and approaching demand, downstream buyers have started to purchase. Under current policy pressure, the upside of the spot price is limited, and the futures are expected to fluctuate strongly following the movement of crude oil. Relevant departments have issued consecutive documents to suppress the urea price. The trading strategy is to go short on a single - side basis without chasing the short position, and to wait and see for arbitrage and over - the - counter trading [5]. 3. Summary According to the Directory 3.1 Comprehensive Analysis and Trading Strategy - **Overview**: The ex - factory prices in different regions show different trends. The supply of urea has reached a new high, the international market is active but has limited impact on China. The demand from compound fertilizer plants is mainly for rigid needs. Urea inventories have started to decline. Under policy pressure, the spot price has limited upside, and the futures are expected to fluctuate strongly. The trading strategy is to go short on a single - side basis without chasing the short position, and to wait and see for arbitrage and over - the - counter trading [5]. - **Core Data Changes** - **Supply**: In the 10th week of 2026 (20260305 - 0311), the capacity utilization rate of coal - based urea in China was 97.43%, a 0.49% week - on - week decrease; the capacity utilization rate of gas - based urea was 78.28%, a 1.68% week - on - week increase. In Shandong, the capacity utilization rate of urea was 95.37%, a 4.56% week - on - week decrease [6]. - **Demand**: In the 11th week of 2026 (20260306 - 0312), the average weekly capacity utilization rate of melamine in China was 53.35%, a 3.9 - percentage - point increase from the previous week. The capacity utilization rate of compound fertilizer in the same period was 45.56%, an 8.54 - percentage - point increase from the previous period. As of March 13, 2026, the urea demand of sample compound fertilizer production enterprises in Linyi, Shandong was 1,640 tons, a 16.33% week - on - week decrease. The arrival volume of urea in the Northeast this week (20260306 - 20260313) was 90,000 tons, an increase of 5,000 tons from the previous week. As of March 11, 2026, the pre - order days of Chinese urea enterprises were 8.06 days, a 4.54% week - on - week increase [6]. - **Inventory**: As of March 11, 2026, the total inventory of Chinese urea enterprises was 957,600 tons, a 12.79% week - on - week decrease. As of March 12, 2026, the sample inventory of Chinese urea ports was 189,000 tons, a 0.53% week - on - week decrease [6]. - **Valuation**: The price of Jincheng anthracite lump coal was stable, the price of Yulin pulverized coal was weak, the urea spot price was firm, and the urea production profit was stable. The fixed - bed production profit was 150 yuan/ton, the water - coal - slurry production profit was 240 yuan/ton, and the entrained - flow bed production profit was 460 yuan/ton. The futures fluctuated, the basis was near par, and the 5 - 9 spread was - 25 yuan/ton [6]. 3.2 Other Data Tracking - Other sections such as "Mainstream Manufacturer Ex - factory Price", "Basis", "Regional Spread", etc., only list the titles, and no specific content is provided for summary.

Report Summary 1. Report Industry Investment Rating - Not provided in the document 2. Core Views - The fundamentals of urea are currently neutral. The daily production and operating rate are at a high level compared to the same period in history. After the Spring Festival, with the restart of some natural gas plants, the daily production is expected to remain high, and the overall supply pressure is still at a historical high. Industrial demand is generally weak but has an upward expectation. The operating rate of compound fertilizers has increased, while that of melamine has decreased. The agricultural demand has temporarily reached its peak, and the comprehensive inventory has increased. The international price has continued to rise due to geopolitical factors, and the price difference between domestic and international markets for exports has widened. The China Nitrogen Fertilizer Industry Association has called on market participants to "not spread or believe rumors" and emphasized that the medium - and long - term urea price should remain stable. The UR2605 contract basis is 4, with a premium/discount ratio of 0.2%, which is neutral. The UR comprehensive inventory is 128.8 million tons (-6.2), which is bearish. 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. The net position of the UR main contract is short, and the short position is increasing, which is bearish. It is expected that the UR main contract will fluctuate widely today [4]. - The bullish factors for urea are that agricultural demand is gradually entering the peak season and overseas prices are continuously strengthening. The bearish factor is that the daily production is at a historical high. The main logic lies in international prices and marginal changes in domestic demand, and the main risk point is the change in export policies [5]. 3. Summary by Relevant Catalogs Urea Overview - **Fundamentals**: Current daily production and operating rate are at a high level year - on - year. After the Spring Festival, with the restart of some natural gas plants, daily production is expected to remain high, and the overall supply pressure is at a historical high. Industrial demand is weak but has an upward expectation. The operating rate of compound fertilizers has increased, while that of melamine has decreased. Agricultural demand has temporarily ended, and the comprehensive inventory has increased. The international price has risen due to geopolitical factors, and the export price difference has widened. The China Nitrogen Fertilizer Industry Association has emphasized price stability. The current spot price of the delivery product is 1860 (+0), and the fundamentals are neutral [4]. - **Basis**: The UR2605 contract basis is 4, with a premium/discount ratio of 0.2%, which is neutral [4]. - **Inventory**: The UR comprehensive inventory is 128.8 million tons (-6.2), which is bearish [4]. - **Disk**: 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 position of the UR main contract is short, and the short position is increasing, which is bearish [4]. - **Expectation**: The UR main contract is expected to fluctuate widely. With the daily production at a high level year - on - year, industrial demand is divided, agricultural demand has reached its peak, and the inventory has increased. It is expected that the UR will fluctuate today [4]. Spot and Futures Market | Region | Price | Change | Main Contract | Price | Change | Inventory Type | Quantity | Change | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Spot Delivery Product | 1860 | 0 | 05 Contract | 1856 | -49 | Warehouse Receipt | 5335 | 2475 | | Shandong Spot | 1890 | 10 | Basis | 4 | 49 | UR Comprehensive Inventory | 128.8 | -6.2 | | Henan Spot | 1860 | 0 | UR01 | 1849 | -34 | UR Factory Inventory | 109.8 | - | | FOB China | 3886 | - | UR05 | 1856 | -49 | UR Port Inventory | 19.0 | - | | - | - | - | UR09 | 1884 | -36 | - | - | - | [6] Supply - Demand Balance Sheet | Year | Capacity | Capacity Growth Rate | Output | Net Import Volume | PP Import Dependence | Apparent Consumption | Ending Inventory | Actual Consumption | Consumption Growth Rate | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2018 | - | 2245.5 | 1956.81 | 448.38 | 18.6% | 2405.19 | 23.66 | 2405.19 | - | | 2019 | - | 2445.5 | 8.9% | 2240 | 487.94 | 17.9% | 2727.94 | 37.86 | 2713.74 | 12.8% | | 2020 | - | 2825.5 | 15.5% | 2580.98 | 619.12 | 19.3% | 3200.1 | 37.83 | 3200.13 | 17.9% | | 2021 | - | 3148.5 | 11.4% | 2927.99 | 352.41 | 10.7% | 3280.4 | 35.72 | 3282.51 | 2.6% | | 2022 | - | 3413.5 | 8.4% | 2965.46 | 335.37 | 10.2% | 3300.83 | 44.62 | 3291.93 | 0.3% | | 2023 | - | 3893.5 | 14.1% | 3193.59 | 293.13 | 8.4% | 3486.72 | 44.65 | 3486.69 | 5.9% | | 2024 | - | 4418.5 | 13.5% | 3425 | 360 | 9.5% | 3785 | 51.4 | 3778.25 | 8.4% | | 2025E | - | 4906 | 11.0% | - | - | - | - | - | - | [9]

1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints - Domestic urea production has increased slightly recently. With no planned shutdowns of enterprise equipment this week and 1 - 2 shutdowns possibly resuming, considering short - term restarts, urea is entering its peak demand season, and short - term agricultural demand is expected to improve. [2] - Due to the relatively high temperature in most agricultural areas during the Spring Festival, it is conducive to the application of "green - turning fertilizer" for wheat. The restocking pace of downstream urea may be faster than in previous years. [2] - The production of high - nitrogen fertilizers in compound fertilizer plants is gradually starting, and the industrial consumption of urea has increased significantly. The compound fertilizer operating rate is expected to continue to rise. [2] - Urea enterprise inventories have increased significantly during the Spring Festival due to reduced logistics. With the recovery of logistics and the improvement of downstream industrial operations, urea demand will increase, and factory shipments may accelerate, with inventories possibly decreasing to some extent. [2] - Although agricultural demand is released after the festival and industrial demand is warming up, the price increase may be limited due to high supply. Attention should be paid to the intensity of demand release. The UR2605 contract is expected to fluctuate in the range of 1800 - 1850 in the short term. [2] 3. Summary by Directory 3.1 Futures Market - The closing price of the Zhengzhou urea main contract is 1819 yuan/ton, with a week - on - week increase of 2 yuan/ton; the 5 - 9 spread is 14 yuan/ton, with a week - on - week decrease of 11 yuan/ton. [2] - The position of the Zhengzhou urea main contract is 266,075 lots, with a week - on - week increase of 3,294 lots; the net position of the top 20 is - 44,501 lots, with a week - on - week decrease of 3,814 lots. [2] - The exchange warehouse receipts of Zhengzhou urea are 0. [2] 3.2 Spot Market - The spot prices in Hebei, Henan, Jiangsu, Shandong, and Anhui are 1870, 1860, 1890, 1890, and 1870 yuan/ton respectively, with week - on - week increases of 20, 30, 30, 30, and 30 yuan/ton. [2] - The basis of the Zhengzhou urea main contract is 73 yuan/ton, with a week - on - week increase of 60 yuan/ton. [2] - FOB prices in the Baltic Sea and China's main ports are 408 and 481 US dollars/ton respectively, with no week - on - week change. [2] 3.3 Industry Situation - Port inventories are 17.4 million tons, with a week - on - week increase of 0.8 million tons; enterprise inventories are 117.6 million tons, with a week - on - week increase of 34.13 million tons. [2] - The operating rate of urea enterprises is 93.16%, with a week - on - week increase of 2.57 percentage points; the daily urea output is 219,400 tons, with a week - on - week increase of 6,100 tons. [2] - Urea exports are 28 million tons, with a week - on - week decrease of 32 million tons; the monthly output of urea is 6,289,610 tons, with a month - on - month increase of 271,170 tons. [2] 3.4 Downstream Situation - The operating rate of compound fertilizers is 33.41%, with a week - on - week increase of 8.91 percentage points; the operating rate of melamine is 55.91%, with a week - on - week decrease of 8.26 percentage points. [2] - The weekly profit of compound fertilizers in China is 209 yuan/ton, with a week - on - week increase of 5 yuan/ton; the weekly profit of melamine with externally purchased urea is - 261 yuan/ton, with a week - on - week decrease of 121 yuan/ton. [2] - The monthly output of compound fertilizers is 5.1799 million tons, with a month - on - month increase of 0.1845 million tons; the weekly output of melamine is 29,100 tons, with a week - on - week decrease of 2,500 tons. [2] 3.5 Industry News - As of February 25, the total inventory of Chinese urea enterprises was 117.60 million tons, an increase of 34.13 million tons from the previous period (February 11), a week - on - week increase of 40.89%. [2] - As of February 26, the sample inventory of Chinese urea ports was 17.4 million tons, a week - on - week increase of 0.8 million tons, a rise of 4.82%. [2] - As of February 26, the output of Chinese urea production enterprises was 1.5355 million tons, an increase of 0.0195 million tons from the previous period, a week - on - week increase of 1.29%; the capacity utilization rate was 93.16%, a week - on - week increase of 1.18%. [2] 3.6 Suggested Attention - Pay attention to the enterprise inventory, port inventory, daily output, and operating rate data from Longzhong on Thursday. [2]

Group 1: Report General Information - Report title: Urea Morning Report [2] - Date: February 25, 2026 [2] - Author: Zhu Tianyi from Dayue Futures Investment Consulting Department [3] - Contact: 0575 - 85226759 [3] Group 2: Industry Investment Rating - No information provided Group 3: Core Viewpoints - The overall fundamentals of urea are bullish, with the current daily production and operating rate at a high level compared to the same period in history. After the Spring Festival, with the restart of some natural gas plants, the daily production is expected to remain high, and the overall supply pressure is still at historically high levels. Industrial demand is weak, while agricultural reserve demand is good and is expected to increase with the start of spring plowing demand. The overall inventory continues to decline, and the destocking pattern is obvious. The external market price remains high, and the price difference between domestic and foreign exports continues to widen. The urea futures main contract is expected to fluctuate today [4]. Group 4: Urea Overview Fundamental Analysis - Supply: Current daily production and operating rate are at a high level compared to the same period, and after the Spring Festival, with the restart of some natural gas plants, the daily production is expected to remain high, and the overall supply pressure is at a historically high level [4]. - Demand: Industrial demand is weak, with the current operating rates of compound fertilizers and melamine at low levels. Agricultural reserve demand is good, and there is still room for growth with the start of spring plowing demand after the Spring Festival [4]. - Inventory: Comprehensive inventory continues to decline, with obvious destocking [4]. - External Market: The external market price remains high, and the price difference between domestic and foreign exports continues to widen [4]. - Policy: On February 12, the China Nitrogen Fertilizer Industry Association issued a statement on the market speculation of the urea guidance price, calling on market participants to "not spread or believe rumors" and emphasizing that the medium - and long - term urea price should be stable [4]. Other Indicators - Basis: The basis of the UR2605 contract is -25, and the premium/discount ratio is -1.4%, which is bearish [4]. - Inventory: The UR comprehensive inventory is 1.001 million tons (-83,000 tons), which is bullish [4]. - Disk: 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 position of the UR main contract is short, and short positions are increasing, which is bearish [4]. Factors Affecting the Market - Bullish factors: Inventory destocking and good reserve demand [5]. - Bearish factors: Daily production at a historical high [5]. - Main logic: International prices and marginal changes in domestic demand [5]. Group 5: Market Data Spot and Futures Prices | Region | Price | Change | Main Contract | Price | Change | | --- | --- | --- | --- | --- | --- | | Spot delivery product | 1830 | +20 | 05 contract | 1855 | +22 | | Shandong spot | 1850 | +40 | Basis | -25 | -2 | | Henan spot | 1830 | 0 | UR01 | 1800 | +23 | | FOB China | 3237 | | UR05 | 1855 | +22 | | | | | UR09 | 1822 | +30 | [6] Inventory Data | Type | Quantity | Change | | --- | --- | --- | | Warehouse receipts | 8235 | -2147 | | UR comprehensive inventory | 1.001 million tons | -83,000 tons | | UR factory inventory | 835,000 tons | 0 | | UR port inventory | 166,000 tons | 0 | [6] Group 6: Supply - Demand Balance Sheet | Year | Capacity | Capacity Growth Rate | Output | Net Import Volume | PP Import Dependence | Apparent Consumption | Ending Inventory | Actual Consumption | Consumption Growth Rate | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2018 | | 2245.5 | | 1956.81 | 448.38 | 18.6% | 2405.19 | 23.66 | 2405.19 | | | 2019 | | 2445.5 | 8.9% | 2240 | 487.94 | 17.9% | 2727.94 | 37.86 | 2713.74 | 12.8% | | 2020 | | 2825.5 | 15.5% | 2580.98 | 619.12 | 19.3% | 3200.1 | 37.83 | 3200.13 | 17.9% | | 2021 | | 3148.5 | 11.4% | 2927.99 | 352.41 | 10.7% | 3280.4 | 35.72 | 3282.51 | 2.6% | | 2022 | | 3413.5 | 8.4% | 2965.46 | 335.37 | 10.2% | 3300.83 | 44.62 | 3291.93 | 0.3% | | 2023 | | 3893.5 | 14.1% | 3193.59 | 293.13 | 8.4% | 3486.72 | 44.65 | 3486.69 | 5.9% | | 2024 | | 4418.5 | 13.5% | 3425 | 360 | 9.5% | 3785 | 51.4 | 3778.25 | 8.4% | | 2025E | | 4906 | 11.0% | | | | | | | [9]

Report Date - The report is dated February 11, 2026 [2] Report Industry Investment Rating - Not mentioned in the report Report's Core View - The current daily production and operating rate of urea are at a high level compared to the same period last year. With the return of maintenance, the operating rate is expected to continue to increase, and the comprehensive inventory is falling, showing an obvious de - stocking pattern. Although it is approaching the Spring Festival, the order demand is still acceptable, with good agricultural reserve demand. In terms of industrial demand, the demand for compound fertilizer is stable, while the operating rate of melamine is falling. There is a large price difference between domestic and foreign markets for exports. Recently, the downstream demand is acceptable, but the overall domestic urea supply still exceeds demand. The spot price of the delivery product is 1800 (+10), and the overall fundamentals are neutral. The UR2605 contract basis is 15, with a premium - discount ratio of 0.8%, which is bullish. The UR comprehensive inventory is 1.084 billion tons (-0.5), which is bullish. The 20 - day moving average of the UR main contract is upward, but the closing price is below the 20 - day line, which is neutral. The main position of UR is net short, and short positions are increasing, which is bearish. It is expected that the UR main contract will fluctuate today [4] - Bullish factors include inventory de - stocking and good reserve demand; bearish factor is domestic oversupply. The main logics are international prices and domestic demand marginal changes [5] Summary by Relevant Catalog Urea Overview - **Fundamentals**: Current daily production and operating rate are high year - on - year. With maintenance return, operating rate will rise. Comprehensive inventory is falling, and de - stocking is obvious. Near Spring Festival, order demand is okay, agricultural reserve demand is good. Compound fertilizer demand is stable in industrial demand, while melamine operating rate is falling. There is a large export price difference, but domestic supply still exceeds demand. Spot delivery price is 1800 (+10), and fundamentals are neutral [4] - **Basis**: UR2605 contract basis is 15, premium - discount ratio is 0.8%, bullish [4] - **Inventory**: UR comprehensive inventory is 1.084 billion tons (-0.5), bullish [4] - **Disk**: The 20 - day moving average of the UR main contract is upward, but the closing price is below the 20 - day line, neutral [4] - **Main Position**: The main position of UR is net short, and short positions are increasing, bearish [4] - **Expectation**: The UR main contract is expected to fluctuate today, with high operating rate year - on - year. Although it's near Spring Festival, downstream reserve demand is okay, and inventory is de - stocking [4] Spot and Futures | Category | Details | | --- | --- | | **Spot** | Spot delivery product price is 1800 (+10), Shandong spot price is 1800 (+10), Henan spot price is 1800 (0), FOB China price is 3058 [6] | | **Futures** | 05 contract price is 1785 (-3), UR01 price is 1735 (-9), UR09 price is 1743 (-5). UR2605 contract basis is 15 (+13) [6] | | **Inventory** | Warehouse receipts are 11036 (+176), UR comprehensive inventory is 1.084 billion tons (-0.5), UR manufacturer inventory is 919 million tons, UR port inventory is 165 million tons [6] | Supply - Demand Balance Sheet - From 2018 to 2024, urea capacity has been increasing, with growth rates of 8.9% in 2019, 15.5% in 2020, 11.4% in 2021, 8.4% in 2022, 14.1% in 2023, and 13.5% in 2024. The import dependence of PP has shown a downward trend from 18.6% in 2018 to 8.4% in 2023 and then slightly increased to 9.5% in 2024. The consumption growth rate was 12.8% in 2019, 17.9% in 2020, 2.6% in 2021, 0.3% in 2022, 5.9% in 2023, and 8.4% in 2024 [9] - In 2025E, the capacity is expected to be 4906, with a growth rate of 11.0% [9]

Group 1: Report Industry Investment Rating - Not mentioned in the provided content Group 2: Core Viewpoints of the Report - This week, urea continues its oscillating pattern with low - price procurement. Attention should be paid to external disturbances. Mainstream factory ex - factory prices in most regions are stable, but market sentiment is low and trading is weak. Industrial compound fertilizer开工率 has increased, but raw material and finished - product inventories are high, and grass - roots orders are scarce. Agricultural procurement is mainly for rigid demand, and traders are starting to sell due to fear of high prices. New orders are weak [4]. - Domestic gas - head maintenance devices have partially returned, and the daily output has rebounded to over 200,000 tons, running at a high level. The Indian tender result is CFR $420 per ton, with a total counter - offer of around 960,000 tons from the east and west coasts. Although international prices have been rising, the domestic - international price difference is still large, but there are no new domestic quotas, so the overall impact is limited [4]. - The compound fertilizer开工率 in the Central Plains and Northeast regions is stable. Compound fertilizer enterprises that stopped production due to environmental protection in Hebei and Henan have resumed production, and enterprises with low raw material inventories are purchasing at low prices. The procurement progress of off - season storage enterprises has basically reached over 70%, and the procurement intensity will gradually slow down [4]. - As the ex - factory price rises, downstream resistance increases, traders sell due to fear of high prices, agricultural procurement enthusiasm cools down, factory orders weaken, and ex - factory quotes start to decline. The futures price decline further cools the spot market sentiment. Although the overall order - receiving situation has improved after the urea manufacturers lower the ex - factory quotes, downstream customers in high - price sales areas still resist. In the short term, it will continue to oscillate, and cautious operation is recommended [4]. - Trading strategy: For single - side trading, short at high prices and do not chase short positions; for arbitrage, wait and see; for over - the - counter trading, wait and see [4] Group 3: Summary of Each Section 2. Core Data Changes - **Supply - National**: In the 3rd week of 2026 (20260115 - 0121), the capacity utilization rate of coal - based urea was 95.30%, a week - on - week increase of 0.70%; the capacity utilization rate of gas - based urea was 54.07%, a week - on - week increase of 2.72%. There were 3 new coal - based device shutdowns and 4 coal - based enterprise shutdown devices resumed production during the period [5]. - **Supply - Shandong**: In the 3rd week of 2026 (20260115 - 0121), the capacity utilization rate of Shandong urea was 97.53%, a week - on - week decrease of 0.37%. The Ming Shui device had a slight production reduction, and other enterprises' production was basically normal [5]. - **Demand - Melamine**: In the 4th week of 2026 (20260116 - 0122), the weekly average capacity utilization rate of Chinese melamine was 63.65%, an increase of 1.47 percentage points from the previous week [5]. - **Demand - Compound Fertilizer**: From 20260116 - 0122, the capacity utilization rate of compound fertilizer in this cycle was 42.96%, a week - on - week increase of 2.88 percentage points [5]. - **Demand - Compound Fertilizer Urea Demand**: As of January 23, 2026, the urea demand of sample compound fertilizer production enterprises in Linyi, Shandong was 1,840 tons, an increase of 460 tons from the previous week, a week - on - week increase of 33.33% [5]. - **Demand - Northeast Arrival Volume**: From 20260116 - 20260123, the arrival volume of urea in the Northeast was 90,000 tons, a decrease of 5,000 tons from the previous week. Downstream factories and traders mainly purchase low - price goods for rigid demand and resist price increases [5]. - **Demand - Advance Receipts**: As of January 21, 2026, the advance order days of Chinese urea enterprises were 5.88 days, a decrease of 0.18 days from the previous cycle, a week - on - week decrease of 2.97% [5]. - **Inventory - Enterprise**: On January 21, 2026, the total inventory of Chinese urea enterprises was 946,000 tons, a decrease of 40,100 tons from the previous week, a week - on - week decrease of 4.07%. The inventory reduction was mainly concentrated in Inner Mongolia [5]. - **Inventory - Port**: As of January 22, 2026, the sample inventory of Chinese urea ports was 134,000 tons, unchanged from the previous week [5]. - **Valuation**: In terms of profit, the price of Jincheng anthracite lump coal rebounded, the price of Yulin pulverized coal was weak, the urea spot price increased, and the urea production profit expanded. The fixed - bed production profit was 70 yuan/ton, the water - coal - slurry production profit was 150 yuan/ton, and the entrained - flow bed production profit was 390 yuan/ton. The futures price rebounded, the basis was around - 80 yuan/ton, and the 5 - 9 spread was 28 yuan/ton [5]

Core Viewpoint - Urea prices in 2026 are expected to exhibit wide fluctuations, with ample supply exerting downward pressure on prices, while flexible export policies provide bottom support [1][14]. Supply and Demand Dynamics - In 2025, the urea industry will see a steady expansion of production capacity, with an expected addition of 4.4 million tons, primarily in the second and third quarters [2]. - By the end of 2025, domestic urea production capacity is projected to reach 79.8 million tons, with a growth rate of 5.83% [2]. - In 2026, approximately 5.27 million tons of urea capacity is still pending production, leading to a nominal capacity growth rate of 6.60% [2]. - The overall supply is expected to remain loose, impacting market prices significantly [6]. Production Costs - The production cost center is anticipated to rise, influenced by a "first suppressed, then lifted" trend in the coal market [3]. - In 2025, the complete production cost of urea from different processes varies, with fixed-bed urea costing 1917 CNY/ton, water-coal slurry at 1526 CNY/ton, and natural gas at 1978 CNY/ton [4]. Downstream Demand - Urea's apparent consumption in China for January to November 2025 was 59.86 million tons, remaining stable year-on-year [8]. - Agricultural demand is the primary driver, with direct fertilization and compound fertilizer accounting for 44.6% and 20.8% of total demand, respectively [8]. - Policies supporting high-standard farmland construction and soil fertility restoration are expected to influence urea demand positively, although the growth rate may slow over time [9]. Seasonal Demand Patterns - Urea demand exhibits seasonal characteristics, with significant usage during the growing seasons, particularly in March, June, and September [10]. - The compound fertilizer production is expected to maintain a slight growth trend, supported by policies aimed at ensuring food production [11]. Export Dynamics - The domestic urea export policy was relaxed in May 2025, with a total of approximately 4.6 million tons of export quotas allocated by November 2025 [13]. - The potential for further expansion of export quotas in 2026 could alleviate domestic supply pressures [14]. Price Outlook - Urea prices in 2026 are expected to fluctuate seasonally, with strong agricultural demand in the first half potentially supporting prices, while increased supply and lower demand in the second half may lead to price declines [14].

1. Report Industry Investment Rating - No information provided 2. Core View of the Report - The current daily production and operating rate of urea are stable, the comprehensive inventory continues to decline, and the de - stocking pattern is obvious. The demand side, including agricultural and industrial demand, is mainly based on on - demand procurement, and the overall procurement is not active. The export internal and external price difference is large, and recent information such as new export quotas still affects the futures market. The domestic urea market remains oversupplied. It is expected that the urea futures market will fluctuate today [4]. 3. Summary by Relevant Catalogs Urea Overview - **Fundamentals**: The current daily production and operating rate are stable, and the comprehensive inventory continues to decline. Agricultural and industrial demand is mainly based on on - demand procurement, and the overall procurement is not active. The operating rates of compound fertilizers and melamine are stable, and the reserve demand continues to slow down. The export internal and external price difference is large, and recent information such as new export quotas still affects the futures market. The domestic urea market remains oversupplied. The spot price of the delivery product is 1740 (+20), and the overall fundamentals are neutral [4]. - **Basis**: The basis of the UR2605 contract is - 38, and the premium - discount ratio is - 2.2%, which is bearish [4]. - **Inventory**: The UR comprehensive inventory is 119.1 million tons (-5.5), which is neutral [4]. - **Futures Market**: The 20 - day moving average of the UR main contract is flat, and the closing price is above the 20 - day moving average, which is bullish [4]. - **Main Position**: The net position of the UR main contract is short, and short positions are increasing, which is bearish [4]. - **Expectation**: The urea main contract is expected to rebound in shock. Industrial demand is mainly on - demand, inventory is being de - stocked, and the domestic oversupply situation is still obvious. It is expected that the UR will fluctuate today [4]. Supply - Demand Balance Sheet | Year | Capacity | Capacity Growth Rate | Output | Net Import Volume | PP Import Dependence | Apparent Consumption | Ending Inventory | Actual Consumption | Consumption Growth Rate | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2018 | - | 2245.5 | - | 1956.81 | 448.38 (18.6%) | 2405.19 | 23.66 | 2405.19 | - | | 2019 | - | 2445.5 | 8.9% | 2240 | 487.94 (17.9%) | 2727.94 | 37.86 | 2713.74 | 12.8% | | 2020 | - | 2825.5 | 15.5% | 2580.98 | 619.12 (19.3%) | 3200.1 | 37.83 | 3200.13 | 17.9% | | 2021 | - | 3148.5 | 11.4% | 2927.99 | 352.41 (10.7%) | 3280.4 | 35.72 | 3282.51 | 2.6% | | 2022 | - | 3413.5 | 8.4% | 2965.46 | 335.37 (10.2%) | 3300.83 | 44.62 | 3291.93 | 0.3% | | 2023 | - | 3893.5 | 14.1% | 3193.59 | 293.13 (8.4%) | 3486.72 | 44.65 | 3486.69 | 5.9% | | 2024 | - | 4418.5 | 13.5% | 3425 | 360 (9.5%) | 3785 | 51.4 | 3778.25 | 8.4% | | 2025E | - | 4906 | 11.0% | - | - | - | - | - | - | [9] Spot and Futures Market Quotes | Region | Price | Change | Main Contract | Price | Change | Inventory Type | Quantity | Change | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Spot Delivery Product | 1740 | 20 | 05 Contract | 1778 | 10 | Warehouse Receipt | 12619 | 243 | | Shandong Spot | 1740 | 20 | Basis | -38 | 10 | UR Comprehensive Inventory | 119.1 | -5.5 | | Henan Spot | 1750 | 0 | UR01 | 1694 | 12 | UR Manufacturer Inventory | 101.9 | - | | FOB China | 2793 | - | UR05 | 1778 | 10 | UR Port Inventory | 17.2 | - | | - | - | - | UR09 | 1745 | 15 | - | - | - | [6] Factors Affecting the Market - **Positive Factors**: Inventory de - stocking [5]. - **Negative Factors**: Domestic oversupply [5]. - **Main Logic**: International prices and marginal changes in domestic demand [5]. - **Main Risk Point**: Changes in export policies [5].