Report Overview - Report Title: Urea Daily Report on August 19, 2025 [2] - Report Type: Energy and Chemical Research Report [2] Industry Investment Rating - Not provided Core View - The overall supply of urea in China is loose, with the daily average output still at a high level. Although some devices are under maintenance, the daily output is around 190,000 tons, the highest in the same period. The demand side shows a downward trend, with low enthusiasm for compound fertilizers in Central and North China, and few grass - roots orders. However, the new Indian tender of 2 million tons has a certain boosting effect on the domestic market sentiment. In the short term, the domestic demand is limited, but the futures market has risen due to news stimulation. It is expected that the domestic urea price will remain firm [5]. Summary by Directory Market Review - Futures Market: Urea futures increased in volume and price in the afternoon, closing at 1817 (+62/+3.53%) [3] - Spot Market: The ex - factory price was weakly stable, and the transaction was average. The ex - factory prices in different regions were as follows: Henan 1660 - 1680 yuan/ton, Shandong small - particle 1680 - 1690 yuan/ton, Hebei small - particle 1700 - 1710 yuan/ton, Shanxi medium and small - particle 1630 - 1640 yuan/ton, Anhui small - particle 1700 - 1710 yuan/ton, and Inner Mongolia 1540 - 1620 yuan/ton [3] Important Information - On August 19, the daily output of the urea industry was 198,400 tons, an increase of 2,000 tons compared with the previous working day and an increase of 30,100 tons compared with the same period last year. The daily operating rate was 85.70%, a 9.39% increase compared with 76.31% in the same period last year [4] Logical Analysis - Market Sentiment: The market sentiment was average, and the ex - factory quotes of urea spot in mainstream areas were stable, but the transaction weakened. In Shandong, the mainstream ex - factory quotes rebounded slightly, the industrial compound fertilizer operating rate increased slightly, but the raw material inventory was sufficient, the finished product inventory was high, and the new order transaction was weak. In Henan, the market sentiment was low, the ex - factory quotes were stable, and the new order transaction was weak. In the areas around the delivery area, the ex - factory price was weakly stable, and the market atmosphere cooled down [5] - Supply: Some devices were under maintenance, and the daily output decreased to around 190,000 tons, still at the highest level in the same period [5] - Demand: A new round of Indian tender was announced, with India tendering 2 million tons again, closing on September 2 and with a shipping date at the end of October. The domestic and foreign price difference was large, which had a certain boosting effect on the domestic market sentiment. The enthusiasm for compound fertilizers in Central and North China was not high, the grass - roots had no intention to stock up, and the compound fertilizer factories' operating rate increased slightly, but the demand for raw materials was low. The inventory of urea production enterprises increased by 68,900 tons to around 957,400 tons, at a high level [5] Trading Strategy - Unilateral: Go long on dips [6] - Arbitrage: Wait and see [6] - Options: Sell put options on pullbacks [9]

Report Industry Investment Rating - No relevant information provided Core View of the Report - Last week, the urea futures market first rose and then fell. Affected by the high price of the Indian tender and the opening of exports to India, the market soared and then declined. The downstream's ability to bear high prices is insufficient. Although there is demand resilience, there is no willingness to purchase urea in a concentrated manner for the time being. It is mainly based on replenishing stocks at low prices. With the support of exports and subsequent purchases by compound fertilizer factories, the downside space for urea is limited, and it will mainly undergo weak consolidation in the short term [1] Summary by Related Catalogs Spot Market Dynamics - In the first half of last week, affected by the rising futures price, the Indian tender price, and export news, the trading atmosphere in the urea spot market was hot, and the spot price increased. In the second half of the week, the export situation was less than expected, and the downstream support was insufficient, so the price stabilized and declined. Since the weekend, the downstream trading has been mediocre, and the price has mainly been adjusted downward [3] Futures Dynamics - Last week, the urea futures first declined and then rose, with an overall increase. As of August 11, the main September contract of urea closed at 1,722 yuan/ton, a decrease of 4 yuan/ton compared to the settlement price on August 4. The trading volume of the main contract last week was 15.6933 million tons, a week-on-week decrease of 163,000 tons; the open interest was 5.7222 million tons, a week-on-week decrease of 370,600 tons. After the Indian tender price increased and China opened the export of urea to India, the futures price soared to a high of 1,791 yuan/ton, but then the export volume was less than expected, and the futures price corrected. Last week, the decline of urea futures was weaker than that of the spot, and the basis weakened [5] Urea Supply - Last week, the weekly output of urea decreased. From July 31 to August 6, the weekly output of urea was 1.3285 million tons, a decrease of 9,100 tons from the previous period, a week-on-week decrease of 0.87%; the average daily output was 189,800 tons, a week-on-week decrease of 13,000 tons. It is expected that no enterprise's equipment will be shut down next week, and one shut-down enterprise will resume production. As of August 11, 2025, the national daily output of urea was 191,700 tons, and the operating rate was 81.62% [12] Urea Demand - Last week, the price of compound fertilizer remained flat compared to the previous week. As of August 8, the quotation of 45% sulfur-based compound fertilizer was 2,950 yuan/ton, remaining unchanged week-on-week. Currently, compound fertilizer factories are in the initial stage of autumn fertilizer production, with an increasing operating load. Sales are mainly based on pre-sales orders, and the finished product inventory in the factories is continuously increasing. Due to the general bearish sentiment in the market and the lack of preparations for large-scale inventory replenishment by compound fertilizer factories, the purchase of raw material urea is mainly based on buying at low prices and making appropriate replenishments. At present, the probability of subsequent concentrated purchases is low. From August 1 to August 7, the operating rate of compound fertilizer was 41.5%, an increase of 3.03 percentage points from the previous week and 2.75 percentage points higher than the same period last year. From August 1 to August 7, the average weekly capacity utilization rate of melamine in China was 61.1%, a decrease of 0.12 percentage points from the previous period and 11.85 percentage points lower than the same period last year. The operating load of melamine decreased, the number of shut-down and maintenance equipment increased during the week, and the downstream demand was weak. It is expected that the operating load will continue to decline in the short term [17] Inventory - As of August 8, 2025, the total inventory of Chinese urea enterprises was 887,600 tons, a decrease of 29,700 tons from the previous week, a week-on-week decrease of 3.24%, and 563,300 tons higher than the same period last year. During the week, the urea output decreased, and the downstream's low-price purchasing increased, so the inventory in the urea factories decreased. It is expected that the urea inventory will continue to decline next week. The inventory of the port samples was 483,000 tons, a decrease of 10,000 tons from the previous week. As the export goods gradually left the port, the port inventory decreased [19] International Market - China will export a limited quantity of urea to India, with an expected export volume of 200,000 - 300,000 tons. The price of the IPL Indian tender is higher than the market expectation, and India's demand for urea is still increasing. It is expected that a new tender will be launched in September. Except for India and Brazil, the demand in other global markets has declined to varying degrees. It is expected that the international urea price will have a correction trend before the new demand from these two countries emerges. As of August 8, the FOB price of small-grain urea in China was reported at $460/ton, a week-on-week increase of $50/ton; the FOB price in the Baltic Sea was reported at $455/ton, a week-on-week increase of $20/ton; the price in the Arabian Gulf was $512.5/ton, a week-on-week increase of $20/ton; the CFR price in Southeast Asia was reported at $457.5/ton, a week-on-week increase of $20/ton. As of August 8, the FOB price of large-grain urea in China was reported at $467.5/ton, a week-on-week increase of $30/ton; the FOB price of large-grain urea in Egypt was $502.5/ton, a week-on-week increase of $12.5/ton; the FOB price of large-grain urea in the Arabian Gulf was $456.5/ton, a week-on-week increase of $7/ton; the FOB price of large-grain urea in the Baltic Sea was $455/ton, a week-on-week increase of $15/ton; the CFR price in Southeast Asia was reported at $465/ton, a week-on-week increase of $7.5/ton; the FOB price in the US Gulf was reported at $446.5/ton, a week-on-week decrease of $12.5/ton [21]

Report Industry Investment Rating There is no information provided regarding the report industry investment rating. Core Viewpoints of the Report - The overall view on urea is neutral. In terms of supply, summer maintenance has increased, leading to a decline in production; export profits are high, but export quotas have not been significantly relaxed. For demand, the autumn pre - sales of compound fertilizers have started, with a slow increase in the operating rate, and industrial demand is lukewarm. In the short term, domestic driving factors are not obvious, and attention should be paid to changes in export policies [4]. - The view on the month - spread is neutral to bullish. Opportunities for the month - spread to strengthen due to export boosts can continue to be monitored [4]. - The view on policies is neutral. There are market rumors about an increase in the export guidance price and the release of a new round of export quotas, but there is no definite news of a significant relaxation of exports [4]. - The view on the spot market is neutral. The operating rate of compound fertilizers is slowly increasing, but enterprise orders are stable, and trading is lukewarm [4]. - The view on inventory is neutral. Enterprise inventories continue to decline, while port inventories continue to rise. Some enterprise inventories are transferred to ports, and export demand supports the current urea price [4]. - The view on exports is neutral to bullish. International prices continue to rise, further increasing potential export profits. In June, urea exports reached 70,000 tons. Based on the significantly increased port inventories, export volumes may further increase. There are rumors that the second - batch export quotas have been released, but the export volume is still limited [4]. - The view on demand is neutral. Compound fertilizer enterprises are advancing autumn fertilizer orders as needed, with a slow increase in the operating rate. The demand for melamine is weak, and the operating rate may remain low. Domestic demand lacks imagination [4]. Summary by Related Catalogs Spot Price Slightly Stabilized - Domestic agricultural demand is in the off - season. Although compound fertilizers have started autumn fertilizer production, the operating rate is rising slowly. There are market rumors that the pricing of the second - batch export quotas is high, resulting in fewer transactions of small and medium - sized particles and hindering small - package urea exports. Overall demand has not significantly increased, and enterprise sales are lukewarm [12]. - The export profit has further expanded. There are rumors that the second - batch quotas have been issued, and the export volume may increase [33]. Operating Rate May Remain High - Coal - based profits are still good. Summer maintenance has begun, causing the operating rate to decline, but it remains at a high level in recent years. According to Longzhong Information, some enterprises are under maintenance this period, and some are resuming production. Next week, one enterprise plans to shut down, and 4 - 5 shut - down enterprises' devices may resume production. The operating rate may slightly rebound, and supply pressure still exists [39]. Enterprises Continue to Reduce Inventory, and Port Aggregation Increases - This week, enterprise inventories continued to decline slightly. Low - price order receipts improved, but new order transactions were limited. Port inventories continued to rise, with large - particle goods arriving at Yantai Port and small - particle goods arriving at Rizhao, Tianjin, Zhenjiang, and Lianyungang Ports, while other ports showed no obvious changes [51]. Urea Profits Support High Operating Rates - Although coal prices have stabilized, they lack the basis for a continuous rebound. Coal - based urea still maintains high profits [60]. - As urea prices fluctuate at a low level, the profit of gas - based urea has almost disappeared [70]. Export Expectations May Improve - In June 2025, China exported a total of 4.29 million tons of various fertilizers, including 70,000 tons of urea, 1.86 million tons of ammonium sulfate, 510,000 tons of diammonium phosphate, and 170,000 tons of monoammonium phosphate. From January to June 2025, China's cumulative export of various fertilizers was 17.13 million tons, a year - on - year increase of 35.9%; the cumulative export amount was 4.069 billion US dollars, a year - on - year increase of 25.9% [75]. Demand is Lukewarm - This week, the atmosphere in the compound fertilizer market has improved. The prices of raw materials, led by potash fertilizer, have risen. Autumn fertilizer pre - sales have started, and the market is oscillating strongly. The operating rate is slowly increasing. The prices of upstream synthetic ammonia are oscillating at a low level, while the prices of phosphate ammonium and potash fertilizer have risen. Urea prices remain range - bound. Currently, the sales of autumn fertilizers are the same as in previous years. In the short term, the supply and demand of compound fertilizers are stable, and price fluctuations are limited [85][91]. - The downstream demand for melamine is weak, and some panel factories have shut down for holidays. However, since the price is close to the cost, the downward space is also limited. Some large - scale devices in Sichuan and Xinjiang have resumed, and some devices in Xinjiang and Shandong are expected to resume next week. The operating rate of melamine may slightly increase [99][103]. Coal is Weak, and Gas is Strong - Recently, coal consumption has entered the peak season. High temperatures in many places have increased the power load, and coal demand has increased, leading to a stable rebound in prices. However, due to the increase in new - energy power generation squeezing thermal power demand and the high inventory of power plants, overall, coal prices lack the power for continuous upward movement [130]. - Synthetic ammonia shows a differentiated trend of falling in the north and rising in the south. In the northern market, supply has increased due to the resumption of maintenance enterprises, but demand has not increased, putting pressure on prices. In the southern market, affected by the increase in the operating rate of downstream phosphate fertilizer enterprises, low - price enterprises have started to raise their quotes [138]. Futures and Spot are Oscillating, and the Month - Spread is Slightly Strengthening - Recently, the number of warehouse receipts is significantly higher than in the same period in history [164]. Balance Sheet - Recently, there have been many maintenance operations, and production may decrease slightly month - on - month [169]. - The balance sheet shows the total supply, production, imports, total demand, and other data of urea from September 2024 to December 2025, as well as the year - on - year changes in production, supply, and consumption [167].

Core Viewpoint - The urea market is expected to experience a downward price trend in the second half of 2025 due to seasonal demand fluctuations, high inventory levels, and ongoing supply pressures, despite potential short-term rebounds in August and September driven by agricultural demand and export activities [1][13]. Production Capacity and Profitability - In the first half of 2025, the urea industry added 3.51% in production capacity, totaling 309 million tons, with a theoretical capacity increase from 76.7 million tons to 79.39 million tons [2]. - The industry is projected to add another 292 million tons of capacity in the second half of 2025, leading to a total capacity increase of 7.31% for the year [2]. - The profitability of urea production is under pressure, with costs primarily driven by coal and natural gas prices, which account for about 70% of total production costs [2][3]. Cost Analysis - As of June 2025, the production costs for urea varied by production method, with natural gas-based urea costing 1971 CNY/ton, fixed bed process at 1917 CNY/ton, and fluidized bed process at 1478 CNY/ton [3]. - Profit margins for different production methods showed significant variation, with fixed bed and fluidized bed processes experiencing improved margins, while natural gas-based production faced losses [3]. Market Demand Dynamics - Agricultural demand for urea is expected to decline in July due to the seasonal off-peak period, with a potential rebound in August and September driven by fall fertilization and export activities [1][7]. - The overall agricultural demand is supported by the ongoing construction of high-standard farmland, which is projected to increase urea consumption [7][8]. - Industrial demand for urea, particularly from melamine and urea-formaldehyde resin sectors, remains stagnant due to weak real estate market conditions and export challenges [9]. Inventory and Export Policies - Urea port inventories have been rising since May 2025, with expectations of continued accumulation in the third quarter, influenced by export policies and market conditions [10][11]. - The export policy for urea has been clarified, with a total export quota of 2 million tons set for May to October 2025, which may help alleviate some supply pressures [11][12]. Seasonal Trends and Future Outlook - The second half of 2025 is characterized by seasonal demand fluctuations, with expectations of lower production utilization rates due to the agricultural off-season and potential winter heating demands impacting natural gas supply [6][12]. - Overall, the urea market is anticipated to remain oversupplied, with price pressures expected to persist unless significant changes occur in export policies or seasonal storage strategies [13].

Report Industry Investment Rating - Not provided Core Viewpoints - In July, urea prices are still supported, and low - buying opportunities can be considered. However, if domestic agricultural demand weakens and export demand does not increase, urea prices will face significant downward pressure, and the subsequent turnaround lies in exports [1] Summary by Relevant Catalogs 1. Price Changes - **Futures Prices**: On July 10, compared with July 9, UR01 in Shanxi decreased by 3 yuan/ton (-0.17%), UR01 in Shandong increased by 20 yuan/ton (1.18%), UR05 increased by 1 yuan/ton (0.06%), and UR09 increased by 7 yuan/ton (0.40%) [1] - **Domestic Spot Prices**: On July 10, compared with July 9, prices in Shandong increased by 20 yuan/ton (1.09%), in Henan increased by 10 yuan/ton (0.54%), in Hebei remained unchanged (0.00%), in Northeast remained unchanged (0.00%), and in Jiangsu increased by 10 yuan/ton (0.54%) [1] - **Upstream Costs**: On July 10, compared with July 9, the anthracite price in Henan decreased by 80 yuan/ton (-7.41%), and in Shanxi remained unchanged (0.00%); the compound fertilizer (45%S) price in Shandong and Henan remained unchanged (0.00%) [1] - **Downstream Prices**: On July 10, compared with July 9, the melamine price in Shandong decreased by 16 yuan/ton (-0.32%), and in Jiangsu remained unchanged (0.00%) [1] 2. Basis and Spread - On July 10, compared with July 9, the basis of Shandong spot - UR increased by 19 yuan/ton, and the spread of 01 - 05 decreased by 4 yuan/ton [1] 3. Market Conditions - On the previous trading day, the opening price of the main urea futures contract 2509 was 1780 yuan/ton, the highest price was 1790 yuan/ton, the lowest price was 1759 yuan/ton, the closing price was 1777 yuan/ton, the settlement price was 1777 yuan/ton, and the trading volume was 208,229 lots [1] 4. Fundamental Analysis - The supply pressure of urea remains high, with daily production approaching 200,000 tons. The enterprise inventory is slightly decreasing, mainly due to increased port collection, and the upstream enterprise inventory is still around 800,000 tons. The top - dressing demand in July will support the price [1]

Report Summary 1. Report Industry Investment Rating - Not provided in the report. 2. Core View of the Report - In July, urea prices are still supported, and low - buying opportunities can be noted, but the subsequent turnaround depends on exports. The supply pressure of urea remains high, with upstream inventories close to 1 million tons. Although the top - dressing demand in July will support prices, if domestic agricultural demand weakens and export demand is not supplemented, urea prices will face significant downward pressure [1]. 3. Summary According to Relevant Catalogs Urea Futures Prices - UR01 in Shandong remained unchanged at 1682 yuan/ton; in Shanxi, it decreased by 30 yuan/ton to 1630 yuan/ton, a relative change of - 1.81%. UR05 decreased by 2 yuan/ton to 1694 yuan/ton, a relative change of - 0.12%. UR09 increased by 9 yuan/ton to 1721 yuan/ton, a relative change of 0.53% [1]. Domestic Spot Prices (Small - Granule) - In Henan, it remained unchanged at 1780 yuan/ton; in Hebei, it decreased by 10 yuan/ton to 1790 yuan/ton, a relative change of - 0.56%; in the Northeast, it remained unchanged at 1890 yuan/ton; in Jiangsu, it decreased by 10 yuan/ton to 1800 yuan/ton, a relative change of - 0.55% [1]. Basis and Spreads - The basis of Shandong spot - UR decreased by 8 yuan/ton. The 01 - 05 spread increased by 2 yuan/ton [1]. Upstream Costs - The anthracite prices in Henan and Shanxi remained unchanged at 1080 yuan/ton and 820 yuan/ton respectively [1]. Downstream Prices - The price of compound fertilizer (45%S) in Shandong and Henan remained unchanged at 2930 yuan/ton and 2520 yuan/ton respectively. The melamine price in Jiangsu decreased by 100 yuan/ton to 5200 yuan/ton, a relative change of - 1.89% [1]. Important Information - The previous trading day, the opening price of the urea futures main contract 2509 was 1707 yuan/ton, the highest price was 1728 yuan/ton, the lowest price was 1693 yuan/ton, the closing price was 1721 yuan/ton, and the settlement price was 1710 yuan/ton. The position of 2509 was 238,027 lots [1].

Report Industry Investment Rating - Not provided Core View of the Report - The recent rumors of looser urea export policies and the release of a new round of Indian tenders have boosted market sentiment. From the perspective of urea demand, June - July is still the peak season for top - dressing corn in the north, and the loosening of export policies and price drops will stimulate speculative demand. Therefore, the demand for urea in the next two months is expected to be good. Wait for the spot price to fall and stabilize before looking for long - position opportunities [1] Summary by Related Catalogs 1. Price Changes - Urea futures prices: UR01 closed at 1684 yuan/ton on June 27, up 2 yuan (0.12%) from June 26; UR05 closed at 1696 yuan/ton, up 5 yuan (0.30%); UR09 closed at 1717 yuan/ton, down 7 yuan (- 0.41%); Shandong spot price was 1810 yuan/ton, up 10 yuan (0.56%) [1] - Domestic small - particle urea spot prices: In Shanxi, it was 1660 yuan/ton on June 27, up 10 yuan (0.61%); in Henan and Hebei, it remained at 1800 yuan/ton; in the Northeast, it was 1890 yuan/ton; in Jiangsu, it was 1820 yuan/ton, up 10 yuan (0.55%) [1] - Upstream costs: Anthracite prices in Henan and Shanxi remained unchanged at 1080 yuan/ton and 820 yuan/ton respectively [1] - Downstream prices: The price of 45%S compound fertilizer in Shandong and Henan remained at 2930 yuan/ton and 2520 yuan/ton respectively; the price of melamine in Shandong and Jiangsu remained at 5083 yuan/ton and 5300 yuan/ton respectively [1] 2. Basis and Spread - The basis of Shandong spot - UR was 114 yuan/ton on June 27, up 5 yuan from June 26 [1] - The spread of 01 - 05 was - 12 yuan/ton on June 27, down 3 yuan from June 26 [1] 3. Important Information - On the previous trading day, the urea futures main contract 2509 opened at 1735 yuan/ton, with a high of 1740 yuan/ton, a low of 1712 yuan/ton, closed at 1717 yuan/ton, and the settlement price was 1723 yuan/ton. The position of 2509 was 222,536 lots [1] 4. Trading Strategy - Wait for the spot price to fall and stabilize before looking for long - position opportunities in urea futures, but be aware of the risk of changes in export policies [1]