Nitrogen: Heavy trading on ZCE urea futures market

Over 700,000 lots changed hands on the first day of urea futures trading on the Zhengzhou Commodity Exchange (ZCE) in China.

Some 707,900 twenty tonne lots traded on 9 August - the first day of listing - equivalent to more than 14mn t of urea.

Urea for delivery in January 2020 opened at CNY 1,745/t and ended at CNY 1,702/t (241/t) from specified delivery points. The market was especially bearish towards closing.

In monetary terms, urea futures trade totaled CNY 23.07bn ($327mn). Open interest was 78,818 lots at the end of the first day of trading.

On 12 August, a total of 572,400 futures traded, with urea for January 2020 ending at CNY 1,716/t on 546,572 lots sold, worth CNY 18.57bn.

Major Chinese producer Yuntianhua announced on Friday that it will use the urea futures market to hedge its risk.

Currently most urea producers are watching and learning before entering the futures market.

ZCE is one of three officially-approved commodity exchanges in China.