Urea Prices are Keeping the Sluggish Momentum Intact in the Global Market

Urea prices are still falling across the globe due to the absence of major markets as European prices remain below USD 500/MT and Middle East FOB levels are now consistently below USD 300/MT. The fact that India will not be entering the global market with a tender until June will increase the pressure on prices in the coming months before the tender announcement.

Brazil Urea prices have fallen again, with rumors of sales as low as USD 295/MT CFR. A sole bright spot in the Urea market this week was seasonally adjusted demand in NOLA (New Orleans and Louisiana), US, which caused prices FOB barge per tonne to increase from roughly USD 310/MT FOB early this week as high as USD 357/MT. However, this rise is believed to be temporary due to increased Urea supplies from arriving overseas vessels.

The European Urea fertilizer market is still sliding downwards even though the cost of generating feedstock Ammonia before the carbon tax was roughly USD 600/MT, much greater than the cost of imported Ammonia. Furthermore, the absence of feedstock Ammonia demand in Europe is due to massive nitrate inventories stockpiled and low Urea prices. The offtakes remained negligible in the downstream industries, which weighed on the market sentiments and kept them muted. The upstream gas costs for the European Benchmark Dutch TTF, on the other hand, rose to over 15 MMBtu before falling to 13 MMBtu.

According to ChemAnalyst, Europe is about to enter the summer season, and the forecast for the Urea industry over the coming few months appears to be slow, with ever-declining pricing. A period of low prices is currently affecting the global fertilizer market, and it is anticipated to last for at least another few months unless production is reduced and high Urea demand develops in major markets. Brazil must step up with significant imports because the northern hemisphere summer is a time when fertilizer demand is low.