Urea Market Faces Mixed Sentiment Across Key Regions in November 2024

The global Urea market displayed varied sentiments in key regions across the globe.  The price of essential feedstock Ammonia kept fluctuating during this period but its impact on Urea pricing remained limited. In the Chinese market, Urea prices remained stable to soft, reflecting a steady market during the second half of November 2024. Meanwhile, in North America, Urea prices experienced a notable decline, primarily driven by the availability of sufficient inventories to meet end-user demand. In contrast, the Indian market saw a slight price surge, fueled by seasonal restocking in preparation for the upcoming Rabi season. This increase was driven by heightened agricultural activity, as farmers stocked up in anticipation of the planting season.

In China, the Urea market recorded stagnancy in prices during the current review period.  Despite this price stagnancy, market activity has shown a slight improvement, driven by a gradual uptick in domestic demand. Production levels remain steady at approximately 192,100 metric tons per day, reflecting stable manufacturing operations. However, the lack of significant export movement has led to accumulating inventories within the domestic market, further weighing on prices. While the domestic outlook remains cautiously optimistic due to increasing demand, the surplus inventory and muted export activity present challenges to achieving sustained price recovery in the near term.

Similarly, in the North American market, the prices declined during the second half of November 2024. week. This price drop was primarily driven by subdued domestic demand, coinciding with the Thanksgiving holiday period, which typically brings reduced market activity. While feedstock Ammonia prices remained stable, their influence on Urea pricing was minimal. Despite the overall low activity, some bids and trades were noted for shipments scheduled for late November and early December, reflecting selective buyer interest for prompt deliveries. The combination of seasonal factors and tepid demand has sustained the bearish sentiment in the Urea market.

On the other hand, the prices of Urea improved slightly in the Indian market. This increase is largely driven by seasonal restocking ahead of the Rabi planting season, as farmers prepare for heightened agricultural activity. While the price of essential feedstock Ammonia remained stable during this period, its influence on Urea pricing was limited. Inventory levels of both domestically produced and imported Urea remained steady, reflecting a balanced supply scenario. As of November 25, port stock data indicated stable supplies of Urea at Indian ports, contributing to a total inventory approx. 7 million metric tons across the country. Despite the current stability in supply, market participants are closely observing demand trends, as any significant changes could influence price dynamics. The surge in prices underscores the impact of agricultural cycles on the Urea market, even amid an otherwise stable supply environment.

According to ChemAnalyst, Urea prices are expected to experience fluctuations towards the higher end in the coming months. Market insights indicate that while Urea prices remain weak due to low demand, a potential rebound is anticipated in Q1 2025. Additionally, the possibility of export restrictions from China is adding an element of uncertainty to the market.