1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints - The global urea market will face more intense competition and changes due to the increase in global urea production capacity [11] - The price range of UR2605 is expected to be between 1950 - 2000 yuan/ton, and the price range for another situation is 1700 - 2000 yuan/ton [26] 3. Summary by Section 3.1 Urea Q1 2026 Market Review - On March 18, 2026, the price was 1887 yuan/ton, a 9.19% change, with a 2.29% change in another aspect. There were different price levels such as 1760 yuan/ton, 1810 yuan/ton, and 1840 yuan/ton, with proportion changes of 50% and 43%. The FOB price was 600 yuan/ton, and the range was 21 - 22.5 [6] - There were price differences in the 5 - 9 months, with values like -41, -47, +29, 23, etc [8] 3.2 2026 Urea Supply - Demand Pattern Outlook 3.2.1 Supply - In 2024, the domestic urea production capacity was 314 (unit not clear), and there were different production - related data throughout the year. In 2025, the global total production capacity was close to 2.3 billion tons, with 560 million tons of overseas production. In 2026, the domestic production capacity was 6.27 million tons [11] - In 2026, new overseas production capacity is expected in Russia (73 million tons), Mexico (50 million tons), Bangladesh (100 million tons), and India (127 million tons), with a total of 350 million tons [14] 3.2.2 Demand - The agricultural demand for urea has seasonal patterns from March - May, June - July, August, and September - October, with a 12.6% change (not clear what it represents) [16] - There were data on compound fertilizer prices, Shandong melamine prices, compound fertilizer operating rates, compound fertilizer inventories, urea export quantities, and urea Middle - East prices [24][25] 3.3 Views and Strategies - The price is expected to be 1840 yuan/ton with an upward trend, and the UR2605 price range is 1950 - 2000 yuan/ton. Another price range is 1700 - 2000 yuan/ton [26]

Core Viewpoint - The current urea market in China is characterized by an oversupply and high inventory levels, with no significant positive factors on the demand side. Although exports have seen some recovery, they are limited in both time and volume, making it difficult for the supply-demand imbalance to change in the short term, leading to continued weak price performance [1]. Group 1: Supply Situation - The overall trend of urea prices has been a downward fluctuation in the second half of the year, with production profits being squeezed due to falling prices. As of now, the average loss for fixed-bed process urea production is 220 CNY/ton, while gas-based process urea production incurs a loss of 185 CNY/ton. The more advanced gasification process yields a profit of 155 CNY/ton, indicating low overall profit levels in the industry [2]. - Despite a decrease in production enthusiasm due to falling profits, the supply pressure remains significant, with a weekly production of 1.3 to 1.35 million tons, which is notably higher than demand, resulting in rising inventory levels. As of September 18, total inventory for urea enterprises was 1.1653 million tons, with port sample inventory at 516,000 tons, both significantly above the levels of the same period last year [2]. - Looking ahead, the resumption of previously shut-down facilities by the end of September is expected to increase urea supply. However, in the fourth quarter, production losses and gas supply restrictions are anticipated to reduce the operating load of gas-based urea production, which may help alleviate the current oversupply issue [2]. Group 2: Demand Factors - Currently, there is a seasonal recovery in agricultural demand as the market prepares for winter fertilizer reserves. The order situation for compound fertilizers is relatively good, leading to an increase in operating loads and subsequently a slight increase in urea demand. However, overall demand remains below expectations, with weekly demand around 1.15 million tons, failing to keep pace with supply [3]. - Since 2000, China has transitioned from a net importer to a net exporter of urea, with significant export volumes in 2014 and 2015. However, the long-term tight balance between supply and demand has led to considerable price volatility, increasing production costs for agriculture [5]. Group 3: Export Policies - In 2024, to ensure urea demand and stabilize prices, China has suspended urea exports, with only 25,000 tons expected to be exported, a decrease of 399,470 tons or 94.11% compared to 2023. The first half of this year saw only 7,000 tons exported [6]. - The gradual relaxation of export policies has allowed for some recovery in urea exports, with a total of 1.37 million tons exported from July to August, an increase of 740,000 tons or 117.46% year-on-year. However, with a total export cap of 200,000 tons, the impact on the overall supply-demand balance remains limited [6]. - Despite some recovery in exports and seasonal demand, the fundamental issue of oversupply persists, with limited impact from exports due to quota and time restrictions. The overall supply-demand imbalance is expected to remain unchanged, leading to continued low prices in the short term [7].

Group 1 - The current urea market is characterized by a loose supply situation, with daily production gradually recovering, but seasonal demand is not meeting expectations [1] - The low-end price of small particle urea in mainstream regions has recently touched 1580 yuan/ton, while the futures main contract price has been adjusted to around 1670 yuan/ton due to weak market sentiment [1] - There is still an expectation for demand improvement, with a need to monitor export orders and autumn preparation for fertilizers [1] Group 2 - The short-term "weak reality" is evident as the sluggish compound fertilizer market directly drags down urea demand, with sample enterprise inventories remaining at a historical high of 826,200 tons [2] - Compound fertilizer companies are adopting a "production based on sales" strategy, maintaining cautious procurement of urea and focusing on minimum safety stock levels [2] - The long-term "strong expectation" is driven by two main factors: the approaching end of the export window and the gradual initiation of storage work, which is expected to support demand [2] Group 3 - Supply is gradually recovering due to the resumption of previously shut down production facilities, with the overall industry operating rate exceeding 81% and daily production surpassing 200,000 tons [3] - The commissioning of three large urea production facilities in the third quarter adds approximately 1.5 million tons/year of new capacity, intensifying supply pressure and altering regional supply-demand dynamics [3] Group 4 - Due to lower-than-expected demand release and continuous supply increase, industry inventories have risen to 1,165,300 tons, nearly a 50% increase since early Q2 [4] - High inventory levels are causing significant capital occupation pressure for companies, leading some to adopt discount promotion strategies to accelerate cash flow [4] - The urea market is likely to experience a dual increase in supply and demand, with supply expected to rise due to the resumption of production and new installations, while demand improvement relies on the rapid execution of export orders and concentrated autumn demand release [4]

1. Report Industry Investment Rating - No relevant content found 2. Core Viewpoints - The current urea market is supported by exports, with port inventories accumulating but expected to drive down social inventories. Domestic demand is weak, and the medium - and long - term supply - demand pattern is loose. Future prices are mainly driven by export effectiveness and domestic demand recovery speed, and there is still medium - and long - term supply pressure [10] 3. Summary by Directory 3.1 Futures Market 3.1.1 Contract Market - On September 10, 2025, the price of the main urea futures contract fluctuated and declined, closing at 1669 yuan/ton, with a maximum of 1692 yuan/ton and a minimum of 1668 yuan/ton. The trading volume was 169,000 lots, a decrease of 13,000 lots from the previous day, and the open interest was 283,000 lots, an increase of 15,000 lots from the previous day [2] 3.1.2 Variety Price - The latest price of urea2509 was 1613 yuan/ton, down 12 yuan or 0.74%, with an open interest of 4753 lots and a trading volume of 89 lots. The latest price of urea2510 was 1633 yuan/ton, down 17 yuan or 1.03%, with an open interest of 12959 lots and a trading volume of 2029 lots. The latest price of urea2601 M was 1669 yuan/ton, down 17 yuan or 1.01%, with an open interest of 283349 lots and a trading volume of 168507 lots [6] 3.2 Spot Market 3.2.1 Spot Price and Basis Data - The overall urea spot prices in major domestic regions remained stable, with slight differences in some areas due to demand. Representative factory quotes were: Henan Xinlianxin in Central China at 1720 yuan/ton (basis 51 yuan/ton), Ningxia Petrochemical in Northwest China at 1530 yuan/ton (basis - 139 yuan/ton), Ruixing Group in East China at 1650 yuan/ton (basis - 19 yuan/ton), and Hualu Hengsheng in North China at 1660 yuan/ton (basis - 9 yuan/ton) [7] 3.3 Influencing Factors 3.3.1 Industry Information - Export policy is a key factor affecting urea prices. Attention should be paid to the large - scale urea import tender of India's NFL (with a record - high bid volume) and its final procurement result. In September, as an important window for urea export, the accelerating port collection speed has led to a continuous increase in port inventories. The export volume in August and September is expected to be considerable, which may lead to a decline in social inventories. The superimposed effect of accelerated exports and the seasonal recovery of domestic demand also needs to be observed [8][9] 3.4 Market Outlook - The current urea market is supported by exports, with port inventories accumulating but expected to drive down social inventories. Domestic demand is weak, and the effectiveness of manufacturers' price cuts to attract orders is limited. Agricultural autumn fertilizer demand starts slowly, and industrial demand is restricted. On the supply side, production is at a high level, the operating rate will rise, and with new production capacity, the medium - and long - term supply - demand pattern is loose. Attention should be paid to the resonance point of export growth and the seasonal recovery of domestic demand. Future prices are mainly driven by export effectiveness and the recovery speed of domestic demand, but medium - and long - term supply pressure remains [10] 3.5 Demand and Supply 3.5.1 Demand - Domestic urea manufacturers have lowered prices to attract orders, but overall trading is light. Agricultural autumn fertilizer demand is gradually starting, and industrial downstream (compound fertilizers, melamine) mainly makes rigid - demand purchases. Due to previous important events, the operations of the panel and compound fertilizer industries were restricted, resulting in weak overall industrial demand [12] 3.5.2 Supply - The operating rate of the urea industry is expected to rise. Against the background of high production levels, with the release of new production capacity, the medium - and long - term market supply - demand pattern remains loose [12]

Group 1: Market Overview - The global market is experiencing heightened risk aversion due to the US "reciprocal tariff" policy, leading to a significant decline in prices of commodities like crude oil and urea futures [1] - Urea spot market activity has improved as macroeconomic negative factors are gradually digested, with some companies starting to control order volumes and tentatively raise prices [1][5] - The urea market is currently in a state of fluctuation, influenced by the contradiction between demand recovery expectations and weak actual demand [1] Group 2: Agricultural Demand - Agricultural demand for urea remains strong, with direct agricultural use and compound fertilizer demand accounting for 49% and 17% of total demand, respectively [2][3] - The peak demand season for urea aligns with the critical growth period for most crops, particularly in southern regions where rice planting occurs [2] - As drought conditions ease, agricultural demand is expected to gradually recover, with increased fertilizer preparation in regions like Sichuan and Yunnan [2][3] Group 3: Industrial Demand - Industrial demand for urea, particularly for melamine and urea-formaldehyde resin, is closely tied to the real estate sector [3] - The recovery in real estate construction in 2025 is anticipated to stabilize the demand for urea-formaldehyde resin, thereby supporting urea demand [3] Group 4: Production and Capacity - Urea production in April reached 5.8375 million tons, showing a year-on-year increase of 6.91%, despite a month-on-month decline of 4.05% [4] - The national urea capacity utilization rate was 86.23% as of April 24, reflecting a year-on-year increase of 2.84% [4] - Urea inventory levels increased to 1.065 million tons by the end of April, marking a 22.72% month-on-month rise due to weakened downstream demand [4] Group 5: Price and Cost Dynamics - Urea prices have softened due to weak coal prices and limited downstream demand, significantly compressing profit margins for producers [6] - The average profit margin for urea produced via certain methods has turned negative, indicating severe challenges for production companies [6] Group 6: Export Outlook - Urea exports remain tightly controlled, with March exports at 0.23 million tons, a 63.62% month-on-month increase, but a 75.25% year-on-year decline [7] - The export situation is expected to remain stable in May, with potential changes in June depending on domestic demand and production capacity [7] Group 7: Future Market Trends - The second half of the year presents both challenges and opportunities, with potential price recovery expected as agricultural demand improves [9] - The market may face increased competition due to excess production capacity, particularly after the peak demand period [9] - Monitoring of export policy changes in June and July will be crucial for market dynamics and profitability [9]