The urea market is currently in a typical consolidation phase ahead of the Lunar New Year holiday. Following the holiday, prices are not expected to experience a sharp unilateral surge or decline. Instead, a more complex landscape is likely to persist, characterized by firmness in key production regions coexisting with low-price areas.
In the short term, psychological support for quotations appears to have formed around the 1,680 yuan/ton level in major producing regions like Shandong and Hebei. Factories in these areas, supported by decent pending orders, exhibit relatively strong price-maintaining sentiment. However, this does not signal a broad-based market strengthening. Ex-factory prices near 1,640 yuan/ton in regions like Henan and the significant price trough around 1,540 yuan/ton in northwestern areas clearly indicate that national supply remains ample and regional supply-demand conditions are imbalanced. This price differential structure ensures that lower-priced supplies will continuously constrain higher-priced regions.
The core dynamic driving the post-holiday market will remain the contest between high supply and stable demand. On one hand, daily production volumes continue at elevated levels, and industrial demand is unlikely to exceed expectations before the Spring Festival. On the other hand, the combination of low enterprise inventories and the underlying anticipation of spring ploughing fertilizer preparation is expected to put a floor under prices, preventing a deep slump. The market currently lacks a clear catalyst to break the current deadlock.
Consequently, the post-holiday market is forecast to move primarily within a range-bound pattern, with prices in main production areas fluctuating narrowly around current levels. Given this outlook, a cautious approach is recommended for all market participants. Distributors and traders are advised to prioritize inventory drawdown and avoid aggressively chasing higher prices. End-users, meanwhile, could leverage regional price differences by seeking cost-effective supplies for small-scale replenishment. A clearer direction for the market will likely require either observable changes in factory production-to-sales ratios or new guidance from the policy level.
