Huatai Futures: Spring Planting and Supply Guarantee Underway, Urea Spot Prices Remain Stable

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Source: Huatai Futures

Author: Chen Li

Market News and Key Data

Urea Market: Main contract closed at 1889 RMB/ton (+14); Henan small particle market price 1870 RMB/ton (+10); Shandong small particle market price 1900 RMB/ton (+10); Jiangsu small particle market price 1900 RMB/ton (+10); Small lump smokeless coal 800 RMB/ton (+0); Shandong urea basis difference 11 RMB/ton (-4); Henan urea basis difference -19 RMB/ton (-4); Jiangsu urea basis difference 11 RMB/ton (-4); Urea production profit 335.0 RMB/ton (+10.0); Export profit 1791.0 RMB/ton (-4.5).

Supply Side: As of March 15, 2026, enterprise capacity utilization rate 93.29% (-0.02%); in-house inventory 958,000 tons (-14,100); port inventory 189,000 tons (-100).

Demand Side: As of March 15, 2026, compound fertilizer capacity utilization rate 45.56% (+8.54%); melamine capacity utilization rate 53.35% (+3.9%); urea pre-received orders 8.06 days (+0.4).

Market Analysis

Urea spot factory prices have reached the March guidance price. China is in a critical period of spring plowing and supply stabilization, with stable spot prices. When urea futures prices strengthen, market participants actively purchase, improving spot transactions. On the supply side, some gas-based plants are resuming operations after technical upgrades, increasing supply. Full release of buffer stocks began in March. Demand for green fertilizer is ongoing, with continued recovery in compound fertilizer production. As terminal fertilizer use approaches, market sentiment improves, and sales volume increases. The melamine market sentiment is positive, prices are rising, and production is rebounding, driven by urgent procurement. International geopolitical conflicts have led to a bullish market sentiment, boosting spot transaction enthusiasm. Domestic inventory is being reduced, while port stocks have slightly accumulated. The Iran situation has caused a significant rise in international urea prices, but there is no new news on domestic export quotas, and high overseas urea prices are difficult to pass through effectively to the domestic market. Continued attention is needed on export dynamics, buffer stock release pace, and the sustainability of spot procurement sentiment.

Strategy

Unilateral: Range-bound fluctuation

Calendar Spread: Watch

Cross-commodity: None

Risks

Plant maintenance activities, agricultural procurement pace, export policy changes

Investment Consulting Business Qualification: Securities Permit [2011] No. 1289

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