Report Industry Investment Rating - Not provided in the report Core Viewpoint - The current downward space for urea is limited, and it is recommended to pay attention to the opportunity of buying on dips for the 01 contract. The reasons are that from a valuation perspective, urea has fallen to a certain level of cost - effectiveness with relatively low upstream profits; from a driving perspective, there are two potential upward drivers: expected supply - side renovation of old devices (about 20% of urea devices are over 20 years old and the current comprehensive operating rate is close to 80% with limited idle capacity) and expected improvement in demand - side exports (optimistic about urea exports from September to October due to the easing of China - India relations) [1] Summary by Relevant Catalogs Urea Futures Price - On September 28, UR01 closed at 1664 yuan/ton, down 5 yuan or 0.30% from September 26; UR05 closed at 1715 yuan/ton, down 5 yuan or 0.29%; UR09 closed at 1735 yuan/ton, down 5 yuan or 0.29% [1] Domestic Spot Price (Small - Granule) - On September 28, prices in Shandong, Shanxi, and Henan remained unchanged at 1600 yuan/ton, 1490 yuan/ton, and 1610 yuan/ton respectively; prices in Hebei were 1640 yuan/ton, down 10 yuan or 0.61%; prices in Northeast China were 1650 yuan/ton, down 10 yuan or 0.60%; prices in Jiangsu remained at 1600 yuan/ton [1] Basis and Spread - On September 28, the basis of Shandong spot - UR was - 115 yuan/ton, up 5 yuan from September 26; the spread of 01 - 05 was - 51 yuan/ton, unchanged [1] Upstream Cost - On September 28, the anthracite prices in Henan and Shanxi remained unchanged at 1000 yuan/ton and 880 yuan/ton respectively [1] Downstream Price - On September 28, the prices of compound fertilizer (45%S) in Shandong and Henan remained at 2930 yuan/ton and 2520 yuan/ton respectively; the prices of melamine in Shandong and Jiangsu remained at 5100 yuan/ton and 5200 yuan/ton respectively [1] Important Information - On the previous trading day, the opening price of the main urea futures contract 2601 was 1666 yuan/ton, the highest price was 1668 yuan/ton, the lowest price was 1639 yuan/ton, the closing price was 1664 yuan/ton, and the settlement price was 1657 yuan/ton [1] Trading Strategy - Pay attention to the opportunity of buying on dips for the 01 contract [1]

Report Industry Investment Rating - Not provided Core View of the Report - The report recommends paying attention to the opportunity of buying on dips for the 01 contract. Currently, urea has fallen to a certain cost - effective level, with upstream profits at a relatively low level and the valuation being relatively cheap. There are two possible upward drivers for urea prices in the future: on the supply side, there is an expectation of renovation of old - fashioned urea plants, and on the demand side, there is an expectation of improved exports. Therefore, the space for further decline in urea prices is limited [1] Summary by Relevant Catalogs Urea Futures and Spot Prices - On September 23, the closing prices of UR01, UR05, and UR09 were 1658 yuan/ton, 1713 yuan/ton, and 1734 yuan/ton respectively. The UR01 decreased by 2 yuan/ton (- 0.12%) compared to September 22, while UR05 and UR09 remained unchanged. Among domestic spot prices, prices in Shandong, Shanxi, Hebei, and Jiangsu decreased by 0.62%, 0.67%, 0.60%, and 0.61% respectively, while prices in Henan and Northeast remained unchanged [1] Basis and Spread - The basis of Shandong spot - UR decreased by 10 yuan/ton to - 103 yuan/ton, and the 01 - 05 spread decreased by 2 yuan/ton to - 53 yuan/ton [1] Upstream and Downstream Costs - The prices of anthracite coal in Henan, Shanxi, and Shandong remained unchanged at 1000 yuan/ton, 880 yuan/ton, and 2930 yuan/ton respectively. The prices of compound fertilizer (45%S) in Henan and Shandong remained unchanged at 2520 yuan/ton and 2930 yuan/ton respectively. The prices of melamine in Shandong and Jiangsu remained unchanged at 5017 yuan/ton and 5200 yuan/ton respectively [1] Important Information - On the previous trading day, the opening price of the main urea futures contract 2601 was 1655 yuan/ton, the highest price was 1664 yuan/ton, the lowest price was 1652 yuan/ton, the closing price was 1658 yuan/ton, and the settlement price was 1658 yuan/ton [1] Trading Strategy - Pay attention to the opportunity of buying on dips for the 01 contract [1]