Report Industry Investment Rating No relevant information provided. Core Viewpoints - In Q1 2026, urea prices continued the overall oscillatory upward trend. Supply increased with a rise in the urea operating rate to about 90% and a 8.2% year - on - year increase in production. Demand from agriculture maintained rigid growth, and industrial demand for urea in urea - formaldehyde resin and melamine increased due to export expectations driven by the Middle East situation. Export quotas had not been newly approved under the spring plowing supply guarantee [3]. - In 2026, the net new capacity of urea is expected to be nearly 3.62 million tons, with a capacity increase of over 3.8%. The operating rate may remain high, and the production increase may reach 4.9%. If the spot price continues to decline, the operating rate may be negatively affected, and the annual production increase may be reduced to 2.5 - 3.0%. Agricultural demand is expected to increase steadily by 3.5%, and compound fertilizer demand may increase by 6.9% due to export expectations [3]. - Domestic industrial demand may remain weak, but the export demand for melamine and urea - formaldehyde resin is expected to increase by 1.3 - 1.8% due to the expected rise in international furniture market prices. Urea export policies may be relaxed, and the export quota policy may continue, which is a major factor for the phased strength of urea prices. Urea is currently the valuation low in the industrial chain, and the increase in export demand for other products may drive the demand for urea indirectly [6]. Summary by Relevant Catalogs 2026 Q1 Market Review - In 2026, urea prices oscillated and rose, with the monthly spread decreasing and the basis rising slightly. Factors affecting the market included the continuous release of domestic production capacity, good demand during the agricultural peak season, the continuation of the urea export quota system, and the increase in the operating rate of melamine and the export demand for plates and furniture [11][13]. Capacity and Production - China's urea is in the stage of new production capacity release since 2020, with new devices using new coal gasification processes and having lower production costs. In Q1 2026, the newly put - into - operation capacity was 2.94 million tons, and the net new capacity was 1 million tons. It is expected that 6.99 million tons of new capacity will be put into operation in 2026, with a net new capacity of 2.97 million tons per year [18]. - According to the new production capacity plan, the new urea capacity may reach 14 million tons in the next 3 years, and the retired capacity is about 3 - 5 million tons, so the net new capacity may reach 9 - 11 million tons. In Q1, the capacity of the replaced fixed - bed process devices reached 1.94 million tons, and the proportion of the fixed - bed process decreased to about 15% [28]. - The cost of gas - based urea is under great pressure. The spot price of urea in 2026 is still significantly higher than the cash - flow cost of fixed - bed devices, while the gas - based urea devices are near the cost line. The international natural gas price has soared, and China's natural gas import dependence is 40%. In the long run, the planned natural gas supply also faces price - adjustment pressure, and export quotas may continue to be tilted towards gas - based enterprises [32]. - The operating rate of urea enterprises has remained high. Under the overall good profit of urea, the operating rate has long remained at an absolute high level of nearly 90%. After the increase in imported gas prices, the operating rate of domestic gas - based devices may face price - adjustment pressure [35]. - Urea production is expected to continue to grow in 2026. Although the speed of capacity release is slightly delayed, production capacity is still being steadily released. The production cost will be further reduced, and it is difficult for the overall capacity release to decrease due to less profit. However, since the operating rate has basically reached the limit of maintenance, the production increase in 2026 may be less than the capacity increase. It is estimated that the urea production in 2026 will increase by about 4.9% year - on - year [38][41]. Industry Chain and Price - The production of nitrogen - containing fertilizers has increased rapidly in recent years. In 2025, the production of synthetic ammonia is expected to increase by 34.5% compared with 2022. Although ammonium sulfate and ammonium chloride have a narrower application scope than urea, they still have certain substitutability when the price difference is large [48]. - After the geopolitical conflict, the prices of synthetic ammonia, ammonium sulfate, and ammonium chloride have risen significantly. The price increase of synthetic ammonia directly pushes up the production cost of urea, and the high export volume of synthetic ammonia is at a historical high. The increase in the export volume of ammonium sulfate and ammonium chloride may drive the potential demand for urea [57][66][70]. - The export increment of nitrogen fertilizers is greater than the production increment. Although the overall production of nitrogen fertilizers has increased by nearly 10%, the export volume has increased by 30 - 50%. In the context of tense geopolitical situations and rising energy prices, the export volume may increase even more, and the overall supply - demand situation of nitrogen fertilizers may become more tense [76]. Demand - **Agricultural Demand**: From 2020 - 2024, the grain sown area and output have increased. The government has introduced policies to increase the effective planting area, and the demand for urea in agriculture is expected to increase steadily by 3.5% in 2026. The demand for compound fertilizers is expected to increase by 6.9% due to the high international fertilizer prices and the growth of domestic agricultural demand [80][97][100]. - **Industrial Demand**: After the Spring Festival, the price of melamine rebounded rapidly, and the production increased by about 30%. The domestic demand for melamine and urea - formaldehyde resin is still weak, but the export demand is strong. It is expected that the demand for melamine and urea - formaldehyde resin for urea will increase by 1.3% and 1.8% respectively in 2026 [105][119][123]. Export - India's urea production may decrease by 5 - 8 million tons in 2026 due to the geopolitical conflict, and it is likely to increase its import demand. The new urea capacity outside China and India in 2026 is expected to be 4 million tons [125][135]. - Since March, the international urea price has risen by nearly 50% due to the geopolitical situation, but the direct export volume of urea has not changed much in the short term due to strict export policies. It is expected that the export volume of urea in 2026 will increase slightly to 5 million tons on the basis of 2025 [138][141]. Balance Sheet - The supply of urea in 2026 is expected to increase, but the growth rate of production may be less than that of capacity. The demand is expected to be slightly greater than the supply, and the low - valued urea in the industrial chain has the expectation of valuation repair [146].

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - In 2025, urea prices continued to oscillate and search for a bottom, with frequent rapid rebounds. Supply remained high, and production increased year - on - year. In 2026, supply is expected to grow further, with a potential 3.5% increase in capacity and a 3.5% increase in production, or 2 - 2.5% if prices fall. Agricultural demand is expected to rise by 2.67%. Domestic industrial demand may remain weak, with a 2% decline in melamine and urea - formaldehyde resin demand. Urea export policies may continue, but the stimulus from exports is weakening. Without unexpected export demand, urea prices will slowly decline until production shows negative feedback [3][6]. Summary by Relevant Catalogs 2025 Market Review - In 2025, urea prices oscillated downward. Key factors included continuous domestic capacity expansion (355 million tons in 2025, 317 million tons expected in 2026, and 600 million tons from 2027 - 2028), decent agricultural demand during peak seasons, changes in export policies, and stable industrial demand [12][14]. - Quarterly events included winter gas restrictions and rising international natural gas prices in Q3, which pushed up international nitrogen fertilizer prices. There were also factors such as spring plowing demand, changes in compound fertilizer export policies, and the start of summer demand [10]. Capacity Trends - China's urea is in a capacity expansion cycle. In 2025, net new capacity was 4.18 million tons, and 2.94 million tons are expected in 2026. Future plans involve adding about 14 million tons and removing 3 - 5 million tons in the next three years, resulting in a net increase of 9 - 11 million tons [19][24]. - Some fixed - bed processes using anthracite are being phased out, with about 13.61 million tons of such capacity (18% of the total) likely to be eliminated in the next five years [24]. Production and Profitability - In 2025, gas - based urea production was unprofitable, but production was not significantly affected due to planned gas supply and export quota support. However, long - term low prices may lead to reduced production [28]. - In 2026, urea production is expected to increase by 3.6%. But due to limited room for increasing the production rate and low prices for gas - based production, the increase in production may be less than the increase in capacity. If prices fall, output growth may drop to 2.3% [34][39]. Nitrogen Fertilizer Market - Production of nitrogen - containing fertilizers has grown rapidly in recent years. In 2025, synthetic ammonia production is expected to be 34.5% higher than in 2022. Urea remains cost - effective compared to other nitrogen fertilizers, but the substitution demand has decreased [49][53]. - Ammonium chloride and ammonium sulfate markets are moving towards a more balanced supply, with supply increasing and the substitution demand for urea limited. The substitution of ammonium sulfate for urea exports may weaken [54][60][62]. - Overall nitrogen fertilizer supply has increased significantly. In 2025, the total nitrogen - containing output of nitrogen fertilizers is expected to maintain a growth rate of over 10%. However, international nitrogen fertilizer prices have weakened, and future export momentum may decline [64][66]. Demand Trends - Agricultural demand is expected to continue to grow moderately. From 2020 - 2024, grain sowing area and production increased. Policies aim to increase grain production by 100 billion jin by 2030. In 2026, agricultural and other demand is expected to rise by 2.7%, and compound fertilizer demand may increase by 1.7% [70][82][85]. - Industrial demand is related to the real - estate market and furniture exports. With weak real - estate demand and falling furniture export prices, the demand for melamine and urea - formaldehyde resin is expected to decline by 2% in 2026 [88][97]. Export Situation - Export policies are crucial. Historically, policies have changed frequently. In 2025, export policies were relaxed through quotas, and exports may reach 4.76 million tons, with a possible increase to 5 million tons in 2026. India's import demand may decrease, while non - China and India regions are expected to add 4 million tons of new capacity in 2026. Export profit remains high, and the quota system is expected to continue in 2026 [102][111][113][116]. Balance Sheet - In 2026, domestic new capacity will continue to be put into operation. Without considering production cuts due to losses, urea production is expected to increase by about 2.54 million tons (3.7%). Demand is expected to see a 2.7% increase in agricultural and other sectors, a 1.7% increase in compound fertilizers, a 2% decrease in industrial demand, and stable or increasing exports. Overall, supply may slightly exceed demand, but there is still a possibility of short - term strength due to export policies [120][121].

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - In the first half of 2026, the central price of urea may rise. After the peak agricultural demand season, the central price is expected to gradually decline in the second half of the year, with a volatile pattern throughout the year. The market may mainly trade on the expectations and discrepancies of urea's peak agricultural demand, export, and storage drives. Traders are advised to focus on band opportunities. The export - related policy adjustment in 2026 remains a key factor in adjusting the domestic fundamentals. The expected operating range of urea prices in 2026 is 1,550 - 1,950 yuan/ton. Strategies suggest focusing on the 5 - 9 positive spread at low prices, and the 9 - 1 and 1 - 5 reverse spreads at high prices [1][86]. 3. Summary According to the Directory 3.1 2025 H2 Urea Trend Review - **Q3**: With sufficient production profit, the overall operating rate and output of the urea industry remained high. Agricultural demand weakened, but new export quotas and the "anti - involution" macro - logic supported the price, resulting in wide - range price fluctuations [5]. - **Q4**: The strong expectations for September were falsified. Supply remained high, and export and domestic demand could not match the supply pressure, leading to a downward price trend. There was a phased rebound in November due to mid - stream reserve replenishment and increased export quotas [9]. 3.2 Demand Side: Urea Demand in 2026 is Expected to Increase - **Agricultural End**: The growth of urea agricultural demand in 2026 may continue, but the growth rate is expected to decline slightly. The demand increment is mainly concentrated from February to May, and corn is the main source of actual demand growth [13][15][17]. - **Industrial End**: A cautious and pessimistic attitude is taken towards the domestic industrial demand for urea in 2026. The demand from melamine, urea - formaldehyde resin, and thermal power denitrification is expected to have no significant increase [13]. - **Export End**: Urea exports in 2026 may continue to grow, mainly concentrated in the third and fourth quarters [14][48]. 3.3 Supply Side: Urea Supply in 2026 is Expected to Increase - **Output**: The urea industry is expected to add 6.51 million tons of new production capacity in 2026, with an annual capacity growth rate of 7.9%. The theoretical capacity will increase from 82.07 million tons to 88.58 million tons, and the output is expected to increase [51][53]. - **Inventory**: In 2026, the upstream enterprise inventory and mid - stream social inventory of urea are expected to show a pattern of destocking in the first half of the year and stockpiling in the second half, with a slightly higher annual average inventory center [51]. - **Profit**: The production profit of urea in 2026 may fluctuate widely. The profit may rebound in the first half depending on the intensity of agricultural demand, and the profit center may decline in the second half, mainly depending on export policies [51].

1. Report Industry Investment Rating - No relevant information provided 2. Core View of the Report - The supply - demand situation of urea is relatively stable, but attention should be paid to the short - term impact of news such as market management of high - energy - consuming and high - emission projects and the acceleration of the elimination of backward production capacity on the market [2] 3. Summary by Directory Market Changes - The weekly price of urea decreased significantly. On December 12, the closing price of the urea 2601 contract was 1625 yuan/ton, a decrease of 48 yuan/ton from the previous week. The highest price during the period was 1670 yuan/ton, and the lowest was 1624 yuan/ton. The daily average price of urea in the Henan spot market was 1670 yuan/ton, a decrease of 22 yuan/ton from the previous week, with a decline of 1.3% [2][3] - The spot price of urea was relatively stable, while the futures price declined, and the main - contract basis strengthened continuously. On December 12, the main - contract basis in the Henan market was 45 yuan/ton, and the weekly basis ranged from 28 to 45 yuan/ton [2][6] - The 1 - 5 spread of urea fluctuated in a narrow range. On December 12, the 1 - 5 spread was - 58 yuan/ton, and the weekly range was from - 68 to - 58 yuan/ton [2][6] Fundamental Changes Supply - The operating load rate of Chinese urea plants was 83.95%, an increase of 1.19 percentage points from the previous week. Among them, the operating load rate of gas - based enterprises was 63.6%, a decrease of 4.54 percentage points from the previous week. The daily average output of urea was 19.79 tons. Next week, the maintenance devices in Shandong may resume production, and the daily output will still be around 200,000 tons [2][9] Cost - The anthracite fines market continued to decline, while the lump coal price remained stable. As of December 11, the tax - included price of anthracite washed small lumps with S0.4 - 0.5 in Jincheng, Shanxi was 890 - 950 yuan/ton, with the same closing price as the previous week [2][12] Demand - In terms of agricultural demand, most of the current purchases are for reserves. In terms of industrial demand, the capacity utilization rate of compound fertilizer enterprises was 40.62%, an increase of 0.09 percentage points from the previous week. The inventory of compound fertilizers was 67.74 tons, a decrease of 0.65 tons from the previous week. The operating rate of compound fertilizers has increased recently, and the speed of finished - product inventory reduction has slowed down. Compound fertilizers are in the final stage of autumn fertilizers, and the pre - sales of winter reserve fertilizers are the main focus, with a relatively loose market supply. The support from other industrial demands such as melamine and urea - formaldehyde resin has increased [2][17][21] Inventory - The inventory of urea enterprises was 972,000 tons, a decrease of 91,000 tons from the previous week. The port inventory of urea was 320,000 tons, an increase of 3,000 tons from the previous week. The number of registered urea warehouse receipts was 11,296, totaling 225,920 tons, an increase of 811 receipts or 16,220 tons from the previous week [2][28] Key Points to Watch - The operating situation of compound fertilizer plants, the reduction and maintenance of urea plants, export policies, and coal price fluctuations [2]

Report Summary 1) Report Industry Investment Rating No relevant content provided. 2) Core View of the Report The urea market is facing continuous inventory accumulation pressure. Although the supply has decreased due to an increase in maintenance devices, the support from compound fertilizer and other industrial demands has weakened. After a short - term improvement in production and sales, there are still pressures. It is expected that the urea price will fluctuate at the bottom, with a reference range of 1550 - 1650 yuan/ton [5]. 3) Summary According to Relevant Catalogs Market Changes - Urea's weekly price fluctuated sideways, rebounding after hitting a new low. On October 17, the closing price of the urea 2601 contract was 1602 yuan/ton, a decrease of 2 yuan/ton from last week, a decline of 0.31%. The daily average price of urea in the Henan spot market was 1541 yuan/ton, an increase of 26 yuan/ton from last week, a rise of 1.72% [5][8]. - The main - contract basis of urea strengthened. On October 17, the main - contract basis in the Henan market was - 61 yuan/ton, with a weekly basis operating range of (- 83) - (- 59) yuan/ton. The 1 - 5 spread of urea weakened. On October 17, the 1 - 5 spread was - 70 yuan/ton, with a weekly operating range of (- 70) - (- 68) yuan/ton [5][10]. Fundamental Changes - **Supply**: The operating load rate of Chinese urea plants was 80.23%, a decrease of 3.5 percentage points from last week. Among them, the operating load rate of gas - based enterprises was 71.33%, a decrease of 1.21 percentage points from last week, and the daily average urea output was 18.86 tons. Next week, maintenance devices in Anhui, Shaanxi and other places will gradually resume production, and the domestic urea spot supply will still be relatively sufficient [5][12]. - **Cost**: The demand - side support for anthracite lump coal was weaker, and the pit - mouth lump coal of coal enterprises in some areas was under significant pressure, with coal prices falling. As of October 16, the含税 price of washed small anthracite blocks with S0.4 - 0.5 in Jincheng, Shanxi was 820 - 900 yuan/ton, with the price center dropping 35 yuan/ton compared to the closing price on September 30 [5][16]. - **Demand**: - Agricultural demand: Nationwide autumn harvest and sowing have begun. Winter wheat has been sown and emerged in most parts of Xinjiang, eastern Qinghai, eastern Gansu, southern Ningxia, Guanzhong in Shaanxi, Shanxi, Hebei, Tianjin and other places. In Gansu, nearly 80% of winter wheat has been sown, and in Shaanxi, over 10%. Rape has been sown in Zhejiang, Hubei and other places. In Chongqing, over 40% of rape has been sown, and in Hubei, over 30%. The average pre - sales of major urea production enterprises was 3.6 days, and the weekly production - sales rate of urea enterprises was 94.3%. With the progress of autumn harvest and sowing, agricultural demand moderately increased, and production and sales improved marginally [5][18][21]. - Industrial demand: The capacity utilization rate of compound fertilizer enterprises was 24.18%, a decrease of 1.32 percentage points from last week. The compound fertilizer inventory was 70.91 tons, a decrease of 2.59 tons from last week, and the domestic compound fertilizer inventory pressure was slightly relieved, entering a destocking trend [5][21]. - **Inventory**: Urea enterprise inventory was 142.1 tons, an increase of 8.3 tons from last week, showing continuous inventory accumulation. Urea port inventory was 74 tons, an increase of 2 tons from last week. The number of registered urea warehouse receipts was 6294, totaling 12.588 tons [5][28].

Report Summary 1) Report Industry Investment Rating No information provided. 2) Core View of the Report The urea market shows a situation of both supply and demand reduction. The report suggests paying attention to the positive spread trading opportunities. The short - term daily output is lower than the same period last year due to increased maintenance devices and a decline in the start - up rate. Agricultural demand is scattered, the compound fertilizer supply - demand pattern has slightly improved but is still in the seasonal inventory accumulation cycle, and other industrial demands are stable. The production and sales of urea are weak, with enterprise inventories continuously increasing and port inventories slightly decreasing. Temporarily focus on the support level of 1630 - 1650 for the 01 contract, and look for positive spread opportunities after the 1 - 5 spread of urea further weakens [4]. 3) Summary by Relevant Catalogs Market Changes - The urea market's production and sales weakened, and the weekly price continued to run weakly. On September 12, the closing price of the urea 2601 contract was 1663 yuan/ton, a decrease of 50 yuan/ton or 2.39% from the previous week. The daily average price of urea in the Henan spot market was 1645 yuan/ton, a decrease of 54 yuan/ton or 3.18% from the previous week [4][7]. - The urea main - contract basis fluctuated within a narrow range. On September 12, the main - contract basis in the Henan market was - 18 yuan/ton, with a weekly basis operating range of (- 22) - (- 12) yuan/ton. The 9 - 1 spread of urea weakened. On September 12, the 1 - 5 spread was - 55 yuan/ton, with a weekly operating range of (- 55) - (- 40) yuan/ton [4][11]. Fundamental Changes - **Supply**: The operating load rate of Chinese urea enterprises was 77.46%, a decrease of 1.67 percentage points from the previous week. Among them, the operating load rate of gas - based enterprises was 71.33%, an increase of 0.18 percentage points from the previous week. The daily average output of urea was 18.56 tons. It is expected that the daily output will run between 18 - 19 tons next week [4][14]. - **Cost**: The price of anthracite lump coal remained firm. As of September 11, the含税 price of washed small anthracite blocks with S0.4 - 0.5 in Jincheng, Shanxi was 840 - 900 yuan/ton, and the含税 price of washed anthracite blocks with S1 - 1.5 in Yangquan, Shanxi was 760 - 800 yuan/ton, both remaining stable compared with the previous week's closing price [4][18]. - **Demand** - **Agricultural demand**: Agricultural demand across the country is currently scattered. The capacity utilization rate of compound fertilizer enterprises was 37.82%, an increase of 4.74 percentage points from the previous week, turning from a decline to an increase. The compound fertilizer inventory was 82.62 tons, a decrease of 1.5 tons from the previous week. The domestic compound fertilizer finished - product pick - up was poor, and the slow fertilizer - preparation progress restricted the start - up, waiting for a certain relief of the compound fertilizer inventory pressure [4][25]. - **Industrial demand**: The operating load rate of melamine enterprises was 53.04%, a decrease of 2.07 percentage points from the previous week, with a weekly output of 2.614 tons. It is expected that the average operating load rate of domestic melamine enterprises will increase next week. The national building materials and home furnishing prosperity index and the sales volume of large - scale building materials and home furnishing stores increased, and the demand support in the panel market improved slightly [28][29]. - **Inventory**: Urea enterprise inventories were 114.6 tons, an increase of 5.2 tons from the previous week, showing continuous inventory accumulation. Urea port inventories were 73.5 tons, a decrease of 6.2 tons from the previous week, with a slight reduction in port inventories. There were 8847 registered urea warehouse receipts, totaling 17.694 tons [4][32]. Key Points of Concern The report suggests focusing on the start - up situation of compound fertilizer, the reduction and maintenance of urea production devices, export policies, and coal price fluctuations [4].