1. Report Industry Investment Rating - No information provided in the given content. 2. Core View of the Report - The overall fundamentals of urea are bullish, with high daily production and operating rates year - on - year, expected to remain at a high level. Industrial demand is mixed, agricultural demand has reached a phased peak, and inventory has accumulated. The UR main contract is expected to fluctuate widely, and it is predicted that the UR will fluctuate today [4]. 3. Summary by Relevant Catalogs Urea Overview - **Fundamentals**: Current daily production and operating rates are at a high level year - on - year, and daily production is expected to remain high, with overall ample supply. Industrial demand has recovered, with the operating rate of compound fertilizers rising and that of melamine falling. Agricultural phased demand has temporarily ended, and comprehensive inventory has accumulated. The overseas price has continued to strengthen due to geopolitical factors, widening the price difference between domestic and foreign exports. The domestic price increase is limited by guidance. The current spot price of the delivery product is 1870 (+10), and the overall fundamentals are bullish [4]. - **Basis**: The basis of the UR2605 contract is - 19, with a premium/discount ratio of - 1.0%, which is bearish [4]. - **Inventory**: The UR comprehensive inventory is 114.7 million tons (-14.2), 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 short position of the UR main contract has increased, which is bearish [4]. - **Expectation**: The UR main contract is expected to fluctuate widely. With high daily production year - on - year, differentiated industrial demand, a phased peak in agricultural demand, and inventory accumulation, the UR is expected to fluctuate today [4]. - **Leverage and Risks**: The bullish factors 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]. Spot and Futures Market | Category | Details | | --- | --- | | **Spot** | The price of the spot delivery product is 1870 (+10), Shandong spot is 1900 (+10), Henan spot is 1870 (0), and FOB China is 3881 [6]. | | **Futures** | The price of the 05 contract is 1889 (+14), the basis is - 19 (-4), UR01 is 1877 (+20), UR05 is 1889 (+14), and UR09 is 1912 (+22) [6]. | | **Inventory** | The warehouse receipt is 8055 (+1675), UR comprehensive inventory is 114.7 million tons (-14.2), UR manufacturer inventory is 95.8 million tons (-14.1), and UR port inventory is 18.9 million tons (-0.1) [6]. | Supply - Demand Balance Sheet | Year | Capacity | Capacity Growth Rate | Output | Net Imports | 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 - No relevant content provided. 2. Core Viewpoints of the Report - In 2025, the urea futures market showed a low - level operation, with the center of gravity rising first and then falling, fluctuating mainly between 1600 - 1950. The supply - demand relationship was continuously loose, and the market followed seasonal patterns [1][2][123]. - In 2026, the urea market will continue the trend of high - start and high - supply, with abundant supply. Agricultural demand will grow, but industrial demand may have limited growth. The export situation may gradually improve, but the supply - demand surplus situation is difficult to change. The urea futures may continue to fluctuate at a low level, with the downward adjustment space limited by cost, and the upward driving force not strong [2][125][126]. 3. Summary According to the Directory 3.1 Urea Market Review 3.1.1 Historical Trend Review - From August 2019 to 2020, the urea futures price fluctuated between 1500 - 1850, lacking a clear trend [12]. - From 2021, due to supply - side reform and the rise of coal prices, the urea price rebounded from a low level, reaching a high of 3357 in October 2021 [13]. - After 2021, due to capacity expansion, policy influence and weakening demand, the urea price entered a downward adjustment phase, and in October 2025, it fell below 1600 [14]. 3.1.2 2025 Urea Trend - In 2025, the urea futures continued to fluctuate in a narrow range, with the overall center of gravity slightly moving down, mainly fluctuating between 1600 - 1930. The annual decline was - 4.80% as of December 12 [17]. 3.2 Price Fluctuation Analysis 3.2.1 Seasonal Characteristics - The demand for urea has obvious seasonal characteristics. May - July is the peak season, accounting for about 40% of the annual demand. After mid - October, it enters the off - season [20]. 3.2.2 Trading Volume and Open Interest Changes - As of the end of November 2025, the trading volume of urea futures was 173,400 lots, and the open interest was 223,800 lots. In 2025, the trading activity increased [27]. 3.3 Macroeconomic Environment 3.3.1 Stable National Economy - In 2025, the national economy maintained a stable and progressive development trend despite challenges, with positive policies playing an important role [31][33]. 3.3.2 The Fed's Third Rate Cut in the Year - In 2025, the Fed cut interest rates three times, and it is expected to cut rates once in 2026 [34]. 3.3.3 LPR Remained Unchanged for Six Consecutive Months - Since May 20, 2025, the 1 - year and 5 - year - plus LPR have remained unchanged at 3.0% and 3.5% respectively, in line with market expectations [38]. 3.4 Urea Supply Analysis 3.4.1 Coal Price Stabilized and Rebounded - In 2025, the coal price first declined and then rebounded. In 2026, the coal supply may remain stable, and the price range may move up [46]. 3.4.2 Spot Market Operated at a Low Level - In 2025, the urea spot price was weak and volatile, with a narrowing range. In 2026, the price may rebound from a low level [49]. 3.4.3 New Capacity was Gradually Released - In 2025, many new urea production capacities came into operation, and the total capacity may reach about 84 million tons by the end of the year. In 2026, the planned new capacity is 3.99 million tons, mainly concentrated at the end of the year [53]. 3.4.4 Sufficient Supply of Goods - In 2025, the urea production increased significantly, and the annual output may reach about 72.09 million tons. In 2026, production is expected to maintain a steady growth [60]. 3.4.5 Enterprise Inventory Declined from a High Level - In 2025, the urea enterprise inventory started at a high level, reaching a record high of 1.7459 million tons in mid - February. As of early December, it slightly decreased to 1.2342 million tons. In 2026, inventory pressure will still exist [73]. 3.5 Downstream Demand Analysis 3.5.1 Export Market Gradually Expanded - In 2025, the urea export increased significantly, with the total export quota exceeding 4 million tons. The annual export volume may approach the 2023 level. In 2026, export prospects are uncertain [82]. 3.5.2 Steady Growth in Market Consumption - In 2025, urea consumption first increased and then decreased, with an estimated annual consumption of about 64.33 million tons. In 2026, consumption is expected to continue to grow [90]. 3.5.3 Agricultural Demand Fluctuated Seasonally - In 2025, the national grain output and sown area increased. In 2026, the sown area is expected to remain stable or increase. The demand for compound fertilizers is relatively stable, and the demand for urea may not increase significantly in 2026 [95][103]. 3.5.4 Industrial Demand was Lackluster - In 2025, the melamine market was weak, with prices hitting new lows and production declining. In 2026, the market will face the long - term game between capacity release and weak demand [107]. 3.6 Supply - Demand Balance Sheet - From 2020 to 2026, urea production showed an increasing trend, while consumption and export fluctuated. In 2026, the supply - demand surplus situation is difficult to change [108][111]. 3.7 Technical Trend Analysis - In the long - term, the urea futures showed a triangular consolidation pattern, with the range of the center of gravity narrowing. The lower support is around 1600 - 1630, and the upper resistance is around 1950 - 2000 [114]. 3.8 Option Market Operation - In 2025, the urea option market was more active, with trading volume and open interest reaching new highs. In 2026, call options can be considered when spring plowing fertilizer preparation starts [120][122]. 3.9 2026 Market Outlook - In 2026, the urea market will maintain a high - start and high - supply trend, with agricultural demand growing and industrial demand having limited growth. The export situation may improve, but the supply - demand relationship will remain loose. The futures price may fluctuate at the bottom, with support around 1500 - 1600 and resistance around 1900 - 2000 [2][125][126]. 3.10 Industry - Related Stocks - As of December 12, 2025, stocks such as Hehua Co., Ltd. and Yuanxing Energy Co., Ltd. are related to the urea industry, with different annual price increases and decreases [127].

Core Viewpoint - The urea market is experiencing significant price fluctuations due to high supply levels and seasonal demand changes, with prices expected to stabilize within the range of 1600 to 1700 yuan/ton in the short term [1] Group 1: Supply and Demand Dynamics - Urea production remains high, with daily output consistently above 190,000 tons, leading to increased inventory levels, which are historically high, reaching up to 1.7 million tons [2] - The agricultural demand for fertilizers is weakening as the season transitions, and industrial demand is recovering slowly, contributing to a supply surplus [1][2] - The upcoming maintenance of gas-based urea production facilities is expected to reduce daily output by over 20,000 tons, potentially lowering total production to around 180,000 tons [2] Group 2: Seasonal and Reserve Demand - Despite the weakening of immediate demand, reserve demand is anticipated to increase, with over 4 million tons expected to be procured by storage companies before March 2026 [3] - Compound fertilizer companies are beginning to stockpile raw materials for winter production, which will gradually increase their operational rates and support market prices [3] - Seasonal reserve demand in the Northeast market is also expected to provide additional support to the urea market [3] Group 3: Policy and Market Conditions - The introduction of export quotas for urea in 2025, with nearly 5 million tons allocated from July to November, indicates a government strategy to manage market prices without seasonal differentiation [4] - The coal market has strengthened post-holiday, with prices rising from 700 yuan/ton to 850 yuan/ton, which will increase production costs for urea [4] - While supply remains a primary pressure on the urea market, the anticipated maintenance of production facilities and the gradual release of reserve demand may provide marginal support, maintaining a range-bound market in the short to medium term [4]

1. Report Industry Investment Rating - Not provided in the document 2. Core Viewpoints of the Report - In October, after a sharp decline on the first day of the National Day holiday, urea prices bottomed out and rebounded. The overall supply - demand of urea was weak, with high enterprise inventories, but the low absolute price limited the downside space. The market was slowly building a bottom waiting for more positive factors. The release of more export quota news stimulated the market, and the price rebounded from the low level. Currently, the fundamental driving force is still lacking, and the overall industrial demand is weak. The follow - up demand mainly focuses on compound fertilizers and off - season storage. Overall, the supply - demand pattern is still relatively loose, and there is limited upward momentum, but the downside space is also limited at the current low price level. It is recommended to wait and see or look for long - position opportunities on dips [12]. 3. Summary by Directory 3.1 Monthly Assessment and Strategy Recommendation - **Market Summary**: In October, urea prices bottomed out after a decline. The domestic agricultural demand was in the off - season, compound fertilizer production declined seasonally, and industrial demand was weak. The overall supply - demand was weak, with high enterprise inventories, but the low price limited the downside. The supply in October was 5.87 million tons, a month - on - month increase of 130,000 tons and a slight year - on - year decline. The latest enterprise operating rate was 82.71%, with room for short - term improvement. The market was boosted by the news of more export quotas. The fixed - bed profit reached a new low, the basis and inter - month spread were in weak oscillations, the export profit was high, and the domestic market was relatively undervalued. The enterprise inventory was 1.5781 million tons, a month - on - month increase of 23,800 tons and still at a high level year - on - year. The port inventory was 79,000 tons, a month - on - month decrease of 31,000 tons [12]. - **Strategy**: Wait and see or look for long - position opportunities on dips [12]. 3.2 Futures and Spot Market - **Price Changes**: In the futures market, the 09 contract price decreased from 1742 to 1736, a decrease of 6; the 01 contract price decreased from 1670 to 1625, a decrease of 45; the 05 contract price decreased from 1717 to 1703, a decrease of 14. In the spot market, the prices in Shandong, Henan, and Hebei all decreased, and the basis in these regions increased. The prices of downstream products such as compound fertilizers and melamine also changed to varying degrees, and the international prices of urea generally showed a downward trend [13]. - **Trading Volume and Open Interest**: The trading volume and open interest of the urea futures market showed an increase in positions and rising prices [28]. 3.3 Profit and Inventory - **Profit**: The production profit of urea was at a low level, especially the fixed - bed profit, which reached a new low [12][32]. - **Inventory**: The enterprise inventory was 1.5781 million tons, a month - on - month increase of 23,800 tons and still at a high level year - on - year. The port inventory was 79,000 tons, a month - on - month decrease of 31,000 tons [12]. 3.4 Supply Side - **Capacity**: There were a number of planned urea production facilities to be put into operation in 2024 - 2025, with a total planned production capacity of several million tons [45]. - **Operating Rate**: The latest enterprise operating rate was 82.71%, with room for short - term improvement. The operating rates of gas - based and coal - based processes both increased [12]. - **Maintenance**: Many enterprises carried out maintenance in 2025, including routine maintenance, fault - based maintenance, and policy - based maintenance, resulting in a certain amount of production loss [49]. 3.5 Demand Side - **Consumption**: The consumption of urea showed seasonal fluctuations. The downstream demand mainly included compound fertilizers, melamine, etc. The compound fertilizer production profit was positive, and the melamine operating rate was at a low level year - on - year [55][70]. - **Export**: The export profit of urea was at a high level. The market was boosted by the news of more export quotas, and the follow - up demand needed to pay attention to export policies and off - season storage [12]. 3.6 Option - related - The document shows the changes in the open interest, trading volume, open interest PCR, trading volume PCR, and volatility of urea options [100][102][109]. 3.7 Industrial Structure Diagram - The document presents the urea industrial chain, research framework analysis mind - map, and industrial chain characteristics, and also provides an overview of the seasonal demand for chemical fertilizers in different regions at home and abroad [112][114][116].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Report's Core View - The overall supply of domestic urea exceeds demand significantly, with both industrial and agricultural demand being weak. The international urea price is strong, but it has limited support for the domestic price. It is expected that the UR contract will show a weak and volatile trend today [4]. - The main logic lies in the marginal changes of international prices and domestic demand, and the main risk point is the change in export policies [5]. Group 3: Summary Based on Related Catalogs Urea Overview - **Fundamentals**: Current daily production and operating rate have slightly declined but remain at a relatively high level. Enterprise inventories are accumulating, and inventories have increased in many provinces such as Gansu and Hebei. Both industrial and agricultural demand are weak, and the domestic urea supply-demand imbalance is still significant. The spot price of the delivery product is 1540 (unchanged), and the overall fundamentals are bearish [4]. - **Basis**: The basis of the UR2601 contract is -60, with a premium/discount ratio of -3.9%, indicating a bearish signal [4]. - **Inventory**: The UR comprehensive inventory is 1.859 million tons (+174,000 tons), which is bearish [4]. - **Market**: The 20-day moving average of the UR main contract is downward, and the closing price is below the 20-day line, showing a bearish trend [4]. - **Main Position**: The net position of the UR main contract is short, and short positions are increasing, which is bearish [4]. - **Expectation**: The main contract of urea is expected to fluctuate weakly. The international urea price is strong, but it has limited support for the domestic price. Both industrial and agricultural demand are weak, and the overall domestic supply exceeds demand significantly. It is expected that the UR will fluctuate weakly today [4]. - **Likely Factors**: International prices are strong [5]. - **Negative Factors**: High daily production and weak domestic demand [5]. Spot and Futures Market - **Spot Market**: The spot price of the delivery product is 1540 (unchanged), the Shandong spot price is 1550 (unchanged), and the Henan spot price is 1540 (unchanged). The FOB China price is 2749 [6]. - **Futures Market**: The price of the 01 contract is 1600 (+3), the price of the UR05 contract is 1669 (-2), and the price of the UR09 contract is 1702 (-5). The basis of the UR2601 contract is -60, with a premium/discount ratio of -3.9% [4][6]. Inventory - The UR comprehensive inventory is 1.859 million tons (+174,000 tons), including 1.444 million tons of UR manufacturer inventory and 415,000 tons of UR port inventory [4][6]. Supply and Demand Balance Sheet - From 2018 to 2024, the urea production capacity has been increasing year by year, with a capacity growth rate ranging from 8.4% to 15.5%. The production volume, net import volume, apparent consumption, and actual consumption have also shown an overall upward trend, while the import dependence has gradually decreased [9].

Report Summary 1. Report Industry Investment Rating No information provided in the given content. 2. Core Viewpoints - The urea market is currently in a state where the overall supply exceeds demand in China. The daily production and operating rate are slightly declining but still at a relatively high level, and the inventory is at a high level. The industrial demand shows a mixed situation with the compound fertilizer operating rate rising and the melamine operating rate being neutral, while the agricultural demand has entered the off - season. Although the theoretical export profit has reached a new high, the export volume has decreased due to policy and other reasons. The report expects the UR contract to fluctuate today [4]. - The main factors affecting the urea market are the strong international price and the weak domestic demand. The main risk point is the change in export policy [5]. 3. Summary by Relevant Catalogs Urea Overview - **Fundamentals**: The urea futures market has been fluctuating weakly recently. The daily production and operating rate are slightly down but still high, and the inventory is high. The industrial demand has a mixed performance, and the agricultural demand is in the off - season. The overall supply in China exceeds demand, and the theoretical export profit is at a new high, but the export volume has decreased. The spot price of the delivery product is 1700 (unchanged), and the fundamentals are generally bearish [4]. - **Basis**: The basis of the UR2601 contract is 42, with a premium - discount ratio of 2.5%, which is bullish [4]. - **Inventory**: The UR comprehensive inventory is 142.1 million tons (+5.1), which is bearish [4]. - **Futures Market**: The 20 - day moving average of the UR main contract is downward, and the closing price is below the 20 - day line, which is bearish [4]. - **Main Position**: The net long position of the UR main contract is increasing, which is bullish [4]. - **Expectation**: The main contract of urea is expected to fluctuate weakly. The international urea price is strong, the export policy has not been liberalized beyond expectations, and the overall supply in China still significantly exceeds demand. It is expected that UR will fluctuate today [4]. Spot and Futures Market | Region | Price | Change | Main Contract | Price | Change | | --- | --- | --- | --- | --- | --- | | Spot Delivery Product | 1700 | 0 | 01 Contract | 1658 | - 2 | | Shandong Spot | 1700 | 0 | Basis | 42 | 2 | | Henan Spot | 1720 | 0 | UR01 | 1658 | - 2 | | FOB China | 3200 | | UR05 | 1713 | 0 | | | | | UR09 | 1734 | 0 | The warehouse receipt quantity is 7535 (unchanged), the UR comprehensive inventory is 142.1 million tons (unchanged), the UR manufacturer inventory is 95.7 million tons (unchanged), and the UR port inventory is 46.4 million tons (unchanged) [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]