Core Viewpoint - The urea market is experiencing a weak downward trend in prices due to high supply levels and cautious purchasing attitudes from downstream sectors [1][2][3]. Supply Pressure - In September, urea production slightly decreased to 5.78 million tons, a month-on-month decline of 2.51%, while the year-on-year growth rate narrowed to 2.54% [2]. - Despite the production decline, urea inventories have accumulated for seven consecutive weeks, reaching 1.2182 million tons by September 25, an increase of 12.19% from the end of August and 20.15% year-on-year [2]. - New production capacities totaling 1.8 million tons were added in late August, further enhancing market supply capabilities [2]. - Weekly average production reached 201,500 tons by September 25, significantly higher than the same period last year, indicating ongoing supply pressure [2]. Demand Weakness - Downstream demand for urea remains weak, particularly in agriculture, where September is a traditional off-season for nitrogen demand [3]. - The demand from compound fertilizer producers is decreasing seasonally, and industrial demand, particularly from melamine and formaldehyde sectors, is also low [3]. - Despite falling urea prices, there has been no significant increase in purchasing willingness from downstream buyers, keeping prices under pressure [3]. Export Policy Impact - Urea production costs are under pressure due to fluctuating coal prices, with most production processes operating near breakeven [4]. - October is typically a low-demand season for electricity, leading to reduced coal consumption and potential short-term pressure on coal prices, which may weaken cost support for urea [4]. - However, with winter approaching, coal demand is expected to rise, and potential weather-related disruptions could support raw material prices in the long term [4]. Market Outlook - In the short term, the urea market is expected to maintain a loose supply structure with prices likely to remain weak [5]. - Long-term prospects may improve as supply-demand dynamics gradually stabilize and raw material costs provide potential support [5]. - The key factor for price recovery will be the actual evolution of supply-demand conditions in the fourth quarter, along with monitoring changes in export policies [5].