Following Their Recent Price Maxima, All Fertilizer-Based Compounds are Now Seeing a Decline

Prices for fertilizers, especially Urea, have dropped significantly in recent weeks, and affordability parameters have also improved. Due to a lack of demand, the prices of Phosphate, Urea, Nitrates, and Ammonia have recently reduced globally. MAP and US DAP prices increased, though. On the other hand, the Canadian fertilizer manufacturer Nutrient is getting ready to increase its ability to generate DAP and nitrogen.

The cost of fertilizer is decreasing alongside the cost of natural gas. This report week, spot offerings decreased at all major sites. Last Wednesday, the Henry Hub spot price was $9.46 per million British thermal units (MMBtu), but yesterday it was $7.72/MMBtu.

After Gazprom reduced pipeline deliveries to Germany, Italy, and other European importers this week, European nitrogen producers were thrown back into the natural gas tidal wave. Furthermore, a critical LNG export facility, Freeport LNG, in the US was shut down until the end of the year due to an explosion, while a fire was detected at gas infrastructure in Russia.

The price of Ammonia decreased in the USA against declining nitrogenous fertilizers, which fell by 30% in the previous week. Prices for anhydrous Ammonia CFR Tampa on June 17, 2022, decreased to about USD 1500/MT as supplies increased in advance of the spring planting season. With a negative trend in the global Ammonia market, the price of downstream derivative Urea started to drop. The top offer for granular Urea at the Indonesian manufacturer Kaltim's tenders this week was USD 547/ton fob, which is less than the highest price that was ultimately agreed upon at the prior tender of USD 688/ton. Most offers were far less than USD 500 per ton.

With shipments beginning in July and high demand from Brazil in Q3, Middle Eastern producers are delaying preparing for a potential Indian tender. Prices in the Middle East are currently about USD 545/ton FOB, down from USD 595/ton last week and the USD 663/ton 52-week high. Granular urea barges have traded hands in the US for USD 410 and USD 420 per short ton, FOB New Orleans, in the previous 24 hours, which is less than half the USD 925/MT 52-week high.