In the lead-up to the National Day holiday, while most enterprises have entered a critical period of concentrated order collection, market trading activity has failed to warm up significantly. Market participants are generally maintaining a cautious and wait-and-see attitude. Considering that urea prices are currently at relatively low levels, the room for further significant declines may be limited.
Weak Sentiment, Low Price Levels
The domestic urea market continues to operate weakly. After breaking through the 1,600 RMB/ton mark—a new low for the year—urea prices are slowly approaching 1,500 RMB/ton. Currently, the ex-factory price for small and medium granules in Shandong is 1,580–1,650 RMB/ton; small granules in Hebei are quoted at 1,620–1,660 RMB/ton; small and medium granules in Henan are at 1,580–1,640 RMB/ton; small granules in Anhui are at 1,580–1,630 RMB/ton; and small and medium granules in Shanxi are quoted at 1,500–1,580 RMB/ton.
On the supply side, daily production hovers between 200,000 and 202,000 tons. With few planned shutdowns for maintenance before the holiday, domestic urea supply remains ample. On the demand side, both industrial and agricultural demand are sluggish, further exacerbating the supply-demand imbalance and maintaining pressure on upstream urea plants to secure orders.
Ahead of the National Day holiday, urea manufacturers have continuously lowered prices to stimulate order uptake and sustain sales momentum. Although prices briefly stabilized and showed slight signs of rebounding in the latter half of last week, the upward momentum was clearly insufficient under the dual pressures of high supply and low demand, making it difficult to form a sustained rising trend. Industry insiders note that manufacturers in key production and sales regions often adopt price-cutting strategies to attract orders before long holidays, a common sales tactic in the urea industry. As the National Day holiday approaches, order volumes at urea plants are gradually accumulating, though pre-sales progress at some enterprises remains slow, with market performance falling short of expectations.
Market Stabilizing, Lacking Momentum for Rebound
Despite urea plants actively working to reduce inventory to free up storage capacity for the holiday period, downstream rigid demand has not shown significant growth in the current market environment. Meanwhile, although positive signals such as favorable export policy news and India’s tender have provided some support to the urea market, the overall domestic sentiment remains bearish. Under the influence of multiple intertwined factors, the current urea market is mostly operating with weak stability, and its future trajectory requires further observation.
International Market in Downturn
Globally, the urea market is currently in a downward price phase, with regional market performance deeply influenced by factors such as supply-demand dynamics, trading activity, and logistics costs. Large granule urea offers in Southeast Asia are at low levels; the Middle East market is relatively subdued, with mainstream large granule urea prices falling, reflecting weak local demand and a lack of strong price support. Iranian urea transaction prices are in a lower range, highlighting its competitiveness in terms of price. In the short term, the international urea market is likely to continue its current weak trend, with prices potentially falling further until a new balance is achieved in market supply and demand.
Conclusion
In summary, the agricultural fertilizer application season has now entered its off-peak period, leading to a significant contraction in market demand. Industrial demand remains weak due to poor operating rates at compound fertilizer plants, resulting in overall low procurement willingness. In a scenario of strong urea supply and weak demand, pessimistic sentiment continues to spread. Without the strong support of substantive demand, it is difficult to find a reasonable basis for price increases in the urea market; even attempts to test higher prices appear lacking in momentum. Moving forward, close attention should be paid to macro sentiment changes reflected in the futures market and whether stockpiling demand can be effectively released.
