尿素ウィークリー: オフシーズンの機能をクリアし、尿素市場は依然として弱く、プレッシャーにさらされている (20260626)

01 Market Overview

1.1 FDD Price Index

This week, the domestic urea market operated weakly overall, with the market price center moving lower. The current market is facing serious supply-demand pressure. Supply remained at a high level, while demand-side support was weak. In terms of market sentiment, there was no clear directional guidance, and participants remained cautious and mostly adopted a wait-and-see stance. Spot producers saw poor new order transactions and continued to lower quotations, while the continued decline in the futures market also restrained spot trading sentiment to some extent.

In the international market, the domestic-foreign price spread narrowed, export profit margins were limited, port collection volumes remained low, and the export side has not yet provided obvious support to the domestic market.

On the supply side, producers’ operating rates increased slightly this week, and national daily output remained at a high level of around 210,000 tonnes. Producer inventories increased slightly, mainly because the decline in new order quotations from urea producers has not yet reached downstream expectations. Buyers and sellers remained in a stalemate, transactions progressed slowly, and producer inventories gradually accumulated.

On the demand side, agricultural demand was mainly based on low-price replenishment, with limited willingness to chase higher prices. In industrial sectors such as compound fertilizer and wood-based panels, operating rates remained low, and rigid procurement was limited, leaving overall demand support weak.

Overall, under the pattern of abundant supply, seasonally weakening demand, and limited export support, the urea market mainly operated under pressure this week, with the price center moving slightly lower. In the short term, the market may continue to fluctuate and consolidate. Going forward, attention should be paid to the pace of inventory digestion at producers and possible changes in export policy.

According to FDD data, as of this Friday, the average domestic small granular urea price index was 1,853.55, down 1.64 from last week, representing a week-on-week decrease of 0.09%.

In the first half of the week, the urea market operated weakly. In the spot market, industry operating rates remained high, overall supply was sufficient, factory inventories accumulated slowly, and shipment pressure gradually increased. As earlier holiday orders were gradually digested, new order transactions weakened, and most producers slightly lowered quotations. In the futures market, earlier policy-driven bullish sentiment had largely been digested, and the trading focus returned to the loose off-season fundamentals. The core supply-demand imbalance continued to pressure the board and drive prices lower.

In the second half of the week, the urea market continued to operate weakly. In the spot market, demand-side support was insufficient. Downstream procurement sentiment across different segments became more cautious, purchasing slowed, and transactions only maintained rigid replenishment levels. On the export side, there was no substantive positive guidance. Mixed bullish and bearish news caused market sentiment to fluctuate repeatedly, confidence in price increases was weak, and more producers cut prices and offered concessions to promote shipments. In the futures market, the main contract fell sharply and broke below the monthly low. Short-term supply-demand pressure continued to weigh on the board. Downstream stocking willingness remained weak, wait-and-see sentiment was strong, upstream quotations continued to decline, and the board moved lower due to a lack of effective demand-side support.

1.2 Delivery Region Quotations

By region, prices in Northeast China remained stable at RMB 1,870-1,920/tonne. Prices in East China remained stable at RMB 1,790-1,850/tonne. Prices for small and medium granular urea in Central China fell to RMB 1,780-1,920/tonne, while large granular urea prices fell to RMB 1,860-1,880/tonne. Prices in North China fell to RMB 1,660-1,910/tonne. Prices in South China fell to RMB 1,860-1,920/tonne. Prices in Northwest China fell to RMB 1,720-1,740/tonne. Prices in Southwest China fell to RMB 1,770-2,100/tonne.

02 Industry Chain Dynamics

2.1 Daily Output

Output: This week, domestic urea output was approximately 1.5085 million tonnes, up 17,800 tonnes from last week, representing a week-on-week increase of 1.19% and a year-on-year increase of 5.44%. Daily output was 215,500 tonnes. During the week, industry daily output stayed above 210,000 tonnes, and supply levels continued to fluctuate at high levels, with the market supply side remaining loose. Average daily output this week was 215,500 tonnes, up 2,500 tonnes from last week. During the period, provinces with week-on-week output increases included Shandong, Shaanxi and Henan, while the province with a week-on-week output decrease was Hebei.

Operating rate: The domestic urea industry operating rate was approximately 90.32%, up 1.07 percentage points week-on-week and up 4.54 percentage points year-on-year. The domestic urea industry operating rate rose during the week and was higher than the same period last year. During the period, provinces with week-on-week increases in operating rates included Shaanxi and Henan, while the province with a week-on-week decline was Hebei.

By product type, large granular urea output was approximately 316,400 tonnes, down 5,500 tonnes from last week, representing a week-on-week decrease of 1.71%; compared with the same period last year, output increased by 30,100 tonnes, representing a year-on-year increase of 10.51%. The operating rate of large granular urea was approximately 87.09%, down 1.51 percentage points from last week and up 0.46 percentage points year-on-year.

Small and medium granular urea output was approximately 1.1922 million tonnes, up 23,400 tonnes from last week, representing a week-on-week increase of 2.00%; compared with the same period last year, output increased by 88,300 tonnes, representing a year-on-year increase of 8.00%. The operating rate of small and medium granular urea was approximately 91.22%, up 1.79 percentage points from last week and up 5.65 percentage points year-on-year.

By production process, coal-based urea output was approximately 1.2311 million tonnes, up 17,800 tonnes from last week and up 141,500 tonnes from the same period last year. The operating rate was approximately 93.70%, up 1.36 percentage points from last week and up 7.29 percentage points year-on-year.

Gas-based urea output was approximately 277,500 tonnes, up 100 tonnes from last week and down 23,100 tonnes from the same period last year. The operating rate was approximately 77.86%, up 0.03 percentage points from last week and up 0.31 percentage points year-on-year.

2.2 Market Inventory

Producers: This week, producer inventories were approximately 1.1336 million tonnes, up 47,800 tonnes from last week, representing a week-on-week increase of 4.40%; compared with the same period last year, inventories decreased by 43,500 tonnes, representing a year-on-year decline of 3.70%. During this cycle, domestic urea producers continued to accumulate inventories. Although the overall pace of inventory accumulation slowed, inventory pressure remained at various producers. With insufficient demand-side support, downstream end-user acceptance was weak, the transmission speed of supply into downstream markets slowed noticeably, and a large volume of cargo remained accumulated in midstream and upstream circulation channels, making it difficult to move smoothly to end users. In addition, exports have been slow to increase, so factory inventory pressure gradually built up.

Provinces with increases in producer inventories included Hubei, Jiangxi, Inner Mongolia, Qinghai, Shaanxi, Sichuan, Xinjiang, Yunnan and Chongqing. Provinces with decreases in producer inventories included Anhui, Gansu, Hebei, Henan, Jiangsu, Ningxia, Shandong, Shanxi and Heilongjiang.

Ports: Total port inventory stood at 149,900 tonnes, flat from last week, representing a week-on-week change of 0.00%; compared with the same period last year, inventories decreased by 55,100 tonnes, representing a year-on-year decline of 26.88%. During this cycle, port inventories continued to operate at low levels. Current overall profit margins have clearly retreated due to the sharp decline in prices, and the arbitrage window has narrowed significantly. Domestic producers face multiple obstacles in taking export orders, and export volume growth has become significantly more difficult. The main change was that some large granular cargoes at Yantai Port left the port sporadically, while other ports saw little change for the time being.

Large granular urea: This week, domestic large granular urea port inventory was 95,900 tonnes, down 5,000 tonnes from last week, representing a week-on-week decrease of 4.96%; compared with the same period last year, inventories decreased by 135,100 tonnes. Large granular urea port inventory decreased slightly during the week and remained lower than the same period last year.

Small granular urea: This week, domestic small granular urea port inventory was 49,000 tonnes, flat from last week, representing a week-on-week change of 0.00%; compared with the same period last year, inventories decreased by 15,000 tonnes. Small granular urea port inventory showed no significant change during the week and remained lower than the same period last year.

2.3 Compound Fertilizer Industry

This week, the market was in the transition period from the end of summer fertilizer demand to the preheating stage of autumn fertilizer demand. Cost support was strong, trading was light, wait-and-see sentiment was strong, and structural divergence was evident.

As of this Friday, the domestic 45%S price index was 3,390.83, while the 45%CL price index was 2,885.45.

On the cost side, upstream raw material trends diverged. Synthetic ammonia and sulfuric acid posted notable increases, urea and potash fluctuated slightly, and phosphate fertilizer remained firm at high levels. Overall compound fertilizer costs moved higher. Low-end market cargoes gradually disappeared, and quotations for balanced formulations rose slightly. However, few enterprises issued new prices for wheat autumn fertilizer, and upstream-downstream bargaining and wait-and-see sentiment persisted.

On the supply side, the compound fertilizer market operating rate was 32.22% this week, up 0.20 percentage points from last week, with the industry operating rate rising slightly during the week. On the one hand, some producers scheduled autumn fertilizer production, and compound fertilizer capacity utilization improved slightly from low levels but still remained low. On the other hand, during the fertilizer preparation period, downstream buyers maintained wait-and-see sentiment, delivery acceptance was insufficient, and producer inventories increased.

On the demand side, summer rigid demand continued to shrink. Summer fertilizer demand in North China was basically over, Jiangsu and Anhui entered the closing stage, and only sporadic replenishment was seen for cash crops. Producer operating rates declined, and a small number of enterprises shifted to producing and stocking wheat fertilizer. Activity on both the supply and demand sides was insufficient, making it difficult to drive prices higher.

Overall, the short-term market is in the transition period between summer and autumn fertilizer demand. Rigid demand support has weakened, while raw material prices remain high and volatile. The market outlook is unclear, and the compound fertilizer market is expected to continue consolidating in the short term. Next week, the domestic compound fertilizer market is expected to maintain a consolidation pattern, with limited quotation changes. Transactions will still depend on sporadic rigid demand release, and autumn fertilizer prices will gradually become clearer as more enterprises participate in quoting.

2.4 Melamine Industry

This week, the domestic melamine market weakened slightly overall. Downward quotation adjustments by producers were limited, with price changes concentrated within a narrow range. Mainstream ex-factory quotations for normal-pressure process units moved lower.

On the cost side, support continued to loosen. The upstream core raw material, urea, fluctuated downward, and the production cost floor continued to move lower, failing to provide effective support for melamine spot prices.

On the supply side, the melamine market operating rate was 59.52% this week, up 2.02 percentage points from last week. Regional equipment changes on the supply side diverged. Major producing regions such as Hebei, Shanxi and Chongqing saw both maintenance and restart operations. Overall, industry operating load recovered slightly, spot supply in market circulation was sufficient, and producers’ inventory digestion slowed.

On the demand side, both domestic and export sales remained weak, lacking effective bottom support. Domestic downstream end-user plants such as wood-based panel and melamine product manufacturers maintained low operating rates. Most enterprises only kept a small number of production lines running at low loads, prioritized consuming earlier raw material inventories, and had weak demand for new raw material procurement. Bulk procurement orders in the market were scarce.

In foreign trade, although ocean freight costs declined somewhat, current domestic spot quotations lacked cost-performance appeal for overseas buyers. Overseas customers showed weak purchasing interest, incremental new export orders were limited, and exports were unable to divert domestic supply pressure.

Overall, the melamine market is expected to continue operating under pressure next week. Mainstream prices are expected to maintain a narrow downward trend, while producers may continue to flexibly adjust quotations and expand discounts to promote shipments. There are currently no conditions for a sharp rebound. Operationally, downstream buyers are advised to purchase on demand, while traders should maintain low-inventory turnover to avoid inventory impairment risk caused by continued price declines.

2.5 International Market Quotations

FOB China bulk small granular urea was quoted at USD 410.01-430.01/tonne, down USD 5-20/tonne. FOB Black Sea small granular urea was quoted at USD 350.01-375.01/tonne, down USD 10-23/tonne. FOB Baltic small granular urea was quoted at USD 355.01-370.01/tonne, down USD 10-23/tonne. FOB Middle East small granular urea was quoted at USD 370.01-410.01/tonne, down USD 40/tonne. CFR Brazil small granular urea was quoted at USD 390.01-405.01/tonne, with the high end down USD 30/tonne. CFR India was quoted at USD 444.91-449.31/tonne, flat from last week.

FOB Iran large granular urea was quoted at USD 355.01-365.01/tonne, down USD 10-15/tonne. FOB Egypt (Europe) large granular urea was quoted at USD 400.01-445.01/tonne, down USD 30-35/tonne. CFR Brazil large granular urea was quoted at USD 400.01-415.01/tonne, with the high end down USD 30/tonne. CFR Southeast Asia large granular urea was quoted at USD 450.01-470.01/tonne, down USD 20/tonne. FOB China large granular urea was quoted at USD 415.01-440.01/tonne, down USD 25-30/tonne.

03 Market Outlook

Supply: Domestic urea supply is expected to gradually come under pressure. Earlier maintenance units are restarting one after another, and some new capacity is expected to come online, so the overall market operating rate is likely to rise and cargo circulation may become looser. Over the next three weeks, 5-6 producers are expected to conduct planned maintenance, while 5 producers are expected to restart. In terms of supply trend, the number of planned maintenance enterprises is limited. Taking short-term failures into account, daily output is expected to fluctuate at high levels.

Inventory: Current producer and port inventories have accumulated to relatively high levels. As expectations for supply-side volume growth strengthen and downstream procurement remains slow, inventory digestion pressure may continue to emerge. In addition, some earlier speculative cargoes are gradually being released, and marketable spot availability is expected to increase, further restricting room for price increases.

Demand: Agricultural demand is in a phased gap period, and the next round of concentrated fertilizer preparation will still take time. Only sporadic replenishment is expected to continue. Industrial demand is also average. Compound fertilizer and wood-based panel enterprises remain constrained by cost transmission and order conditions, maintaining a cautious stance toward raw material procurement, with limited rigid demand follow-up. The market mainly relies on low-end price transactions, active stockpiling willingness is insufficient, and the overall demand side is expected to provide limited support to the market.