Following yesterday's announcement on the implementation of trading limits on some urea futures contracts (hereinafter referred to as the "announcement") issued by the Zhengzhou Commodity Exchange, today, the China Nitrogen Fertilizer Industry Association issued the "Initiative on Standardizing the Urea Export Business and Maintaining the Order of Urea Export" to all nitrogen fertilizer production enterprises. At the same time, there have been recent market rumors that a series of regulatory policies of relevant departments on fertilizer supply and price stability may be launched soon. It can be seen that in the near future, ensuring supply and stabilizing prices will become the main theme of the industry. From the perspective of the market, these news have played a positive regulatory role.
A few days ago, the news about urea exports made the entire urea futures market ups and downs. Guo Qing, a urea researcher at Zhongtai Futures, said that the trading volume of urea futures 2409 contracts exceeded 380,000 contracts on April 12, 17, 18 and 19, significantly deviating from the trading level of the main futures contracts since the beginning of this year. The intervention of speculative funds has led to unusually large fluctuations in futures prices. The rise in futures prices has led to the intervention of spot and futures arbitrage funds, which has led to an increase in the spot price of urea. "This situation occurs in the summer high-nitrogen fertilizer stocking cycle, which is very unfavorable to the supply and price stability of urea. Guo Qing said. Not only that, according to the China Nitrogen Fertilizer Industry Association, in the recent urea export declaration legal inspection, there are also a large number of non-standard trade contracts, "gambling" and "rushing" inspection, and even false inspection declarations, which seriously disrupt the order of urea exports, contribute to irrational fluctuations in the market, and are not conducive to the healthy and sustainable development of the industry. In response to these phenomena, the Zhengzhou Commodity Exchange has imposed trading limits on some futures contracts. According to the Announcement, starting from April 24, 2024, the maximum number of positions opened by non-FF members or clients in urea futures contracts 2406, 2407, 2408 and 2409 in a single day is 2,000 lots. Among them, the number of open positions in a single day refers to the sum of the number of buy and open positions and the number of sell open positions in a single futures contract on a day by a non-FF member or client. The maximum number of open trades in a single day for an account group with actual control relationship is executed on a per-client basis. The number of open positions for hedging is not limited by the trading limit. For non-FF members or clients who exceed the trading limit for the first time, Zhengzhou Commodity Exchange will take regulatory measures to suspend the opening of positions for not less than 5 trading days. If the trading limit is exceeded twice in total, regulatory measures will be taken to suspend the opening of positions for not less than 1 month. If the circumstances are serious, it shall be dealt with in accordance with the relevant provisions of the Measures for Handling Violations of Zhengzhou Commodity Exchange. At the same time, the Zhengzhou Commodity Exchange can adjust the trading limit according to market conditions. Guo Qing pointed out that this measure has successfully limited the intraday speculation of urea futures contracts, and the trading limit will help urea futures price fluctuations return to rationality, so that the policy of ensuring supply and stabilizing prices of spot futures can be implemented. At the same time, in order to further maintain the order of urea export, the China Nitrogen Fertilizer Industry Association issued a six-point initiative: First, standardize the signing of urea export trade contracts. Enterprises need to carry out real urea export trade, and clearly include the advance payment, shipping schedule, destination port (destination country), subject matter, price, quantity and liability for breach of contract clauses in the export contract. The second is to standardize the inspection of urea exports. Enterprises are required to apply for forensic inspection after receiving the advance payment from overseas customers. The third is to standardize the management of urea export inspection goods. Before the issuance of the forensic inspection results, the enterprise shall keep the goods in their original condition and not move to ensure that they comply with the legal provisions of the cargo certificate. Fourth, standardize the export declaration of urea. Enterprises need to arrange the export rhythm in advance to ensure that the customs declaration and export are completed within 30 days after the issuance of the legal inspection certificate. Fifth, actively cooperate with the association and relevant parties to carry out verification and inspection activities related to urea real trade, and take the initiative to reflect and report the chaos of urea exports, and the China Nitrogen Fertilizer Industry Association will provide it to relevant departments in a timely manner. Sixth, take the initiative to withdraw the recent false inspection application. Recently, ensuring supply and price stability has become the main theme of the industry, and it is reported that a series of regulatory policies for relevant departments to ensure supply and stabilize prices may be launched soon. Driven by a series of news, the market price has gradually stabilized, and to a certain extent, it has also stabilized the confidence of dealers in market operations. It is understood that today's Zhengzhou Commodity Exchange urea main contract UR2409 opened at 2035 yuan/ton, closed at 2015 yuan/ton, and settled at 2014 yuan/ton, down 41 yuan/ton from the previous trading day. The domestic urea market is running smoothly, and the price in some regions has fallen by 10~40 yuan/ton, and the downstream follow-up is more cautious. "We have also paid attention to the relevant news recently, and the relevant departments of the state attach great importance to the supply and price stability of fertilizers. I believe that under the regulation and control of the country's macro policy, the price of fertilizer will remain stable during the critical period, and the possibility of a sharp rise and fall in the later period is relatively small. Therefore, I am also actively making payments to manufacturers in order to stock up in time according to market demand. Zhang Penggang, general manager of Shaanxi Kaiyun Ecological Agriculture Development Co., Ltd., said.
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Please indicate in the following format for reprinting: Source: Agricultural Resources Herald Author: Ding Jiahui Editor: Chen Ran Review: Wang Meihong Producer: Wu Junsheng