For the Quarter Ending September 2024
North America
The third quarter of 2024 saw a significant increase in Urea prices in North America, driven by several critical factors. Supply constraints arose from production cuts at multiple Urea plants, exacerbated by adverse weather conditions that disrupted logistics and transportation networks.
In August 2024, a critical shortage became apparent in the North American market, largely due to reduced imports of essential feedstock Ammonia from Trinidad, a key supplier to the United States. As the quarter progressed, the North American fertilizer industry adopted a cautious approach in response to ongoing adverse weather conditions, including hurricanes and thunderstorms. Although Hurricane Francine affected southern Louisiana, market reports indicated that most of the state’s fertilizer sector managed to weather the storm without significant disruption. However, the industry remained vigilant in anticipation of another tropical storm, raising concerns about potential further disruptions.
By the end of the quarter, the price for Urea FOB Illinois in the USA reached USD 345/MT, reinforcing the prevailing positive pricing environment.
APAC
The third quarter of 2024 has been marked by a significant decline in Urea prices across the Asia-Pacific region, particularly in China and Japan, which experienced the most pronounced price fluctuations. Several factors have contributed to this downward trend, including subdued demand due to adverse weather conditions, reduced export opportunities, and persistent global trade uncertainties. In the Chinese market, the narrowing disparity between demand and supply emerged as a critical factor behind the price dip. The ongoing prohibition on Urea exports from China remains firmly in place, allowing only a limited number of shipments under government-to-government (G2G) agreements. This restriction has resulted in stockpiled inventories of Urea within the Chinese market, while fading seasonal demand further supported the downward price trajectory. Similarly, Japan faced challenges during this quarter due to typhoons and storms that adversely impacted already planted crops, leading consumers to adopt a cautious approach toward further purchases. As a result of these dynamics, the latest quarter-ending price for Granular Urea CFR Tokyo stood at USD 339/MT, underscoring the prevailing downward pricing environment in the region. This trend reflects the complex interplay of supply constraints and reduced demand amid significant weather-related disruptions.
Europe
In Q3 2024, the European Urea market exhibited stable pricing, reflecting a neutral sentiment shaped by various influencing factors. Increased demand from both international and domestic markets, spurred by improved weather conditions and the absence of Chinese exports, played a pivotal role in supporting market prices. This surge in demand created a favorable environment for traders to capitalize on the limited supply, contributing to a gradual upward trajectory in prices. Russia experienced the most significant price fluctuations within the region, aligning with the overall market trends observed during the quarter. Despite the stable pricing environment, it is noteworthy that the quarter recorded a 16% decrease in prices compared to the same period last year, indicating a shift in market dynamics. Ultimately, the quarter-ending price of USD 312/MT for Granular FON Yuzhunyy in Russia encapsulates the stability and equilibrium observed throughout the region. This pricing reflects the delicate balance between supply and demand amid evolving market conditions, highlighting the ongoing challenges and opportunities within the European Urea market.
South America
Throughout Q3 2024, the South American Urea market exhibited a mixed pricing trend, with Brazil being the most significantly affected region. In the first month of the quarter, Urea prices surged by USD 13/MT, driven by elevated freight charges in the global market and a shortage of supplies. However, as the quarter progressed, prices began to decline. The reduction in demand from the domestic fertilizer market, coupled with seasonal fluctuations, further contributed to the downward pricing trend. As the harvesting of summer-planted crops approached completion, overall conditions were favorable in most regions. However, the southeastern part of Brazil faced challenges due to earlier hot and dry weather, adversely impacting crop yields. This seasonal lull in fertilizer demand is typical following major planting and harvesting cycles, leading to decreased purchasing activity among farmers. Additionally, severe weather, including storms in parts of Rio Grande do Sul and Santa Catarina, disrupted agricultural operations, further influencing demand dynamics. By the end of the quarter, the price for Granular Urea CFR Manaus in Brazil stood at USD 345/MT, reflecting a consistent downward trend in pricing throughout Q3 2024. This trend underscores the ongoing challenges faced by the market amid shifting agricultural conditions and fluctuating demand.
MEA
Middle Eastern Urea prices demonstrated varied trends throughout Q3. Prices increased during the initial and final months of the quarter, supported by moderate international demand, particularly from India. The absence of China from the global Urea export market significantly impacted demand dynamics in the Middle East, prompting international buyers to secure Urea supplies in preparation for the upcoming planting season, thereby driving prices higher. Additionally, demand from Australia, Africa, and Nepal was notable, along with increased interest in short covering and inquiries from Latin America. Supply constraints were influenced by Ma’aden, a major Ammonia producer, extending its maintenance turnaround until the second-to-last week of September 2024, resulting in temporary shortages of raw materials. Moreover, ongoing military and political conflicts in the region further hindered production activities, intensifying supply challenges. Despite these disruptions, Urea prices declined on a month-on-month basis in August 2024. By the end of the quarter, the price of Urea FOB Al Jubail was recorded at USD 335 per metric ton.
For the Quarter Ending June 2024
North America
The North American urea market exhibited a mixed trend throughout Q2 2024. Prices declined during the initial two months of the quarter, followed by an increase in the final month. This downturn in prices can be attributed to several key factors. Primarily, there was restrained demand from major downstream fertilizer markets, compounded by extreme weather conditions such as heatwaves and geomagnetic storms, which disrupted agricultural activities and reduced consumer purchasing power.
Additionally, an oversupply of urea contributed to the price decline, as manufacturing units continued to operate at full capacity and maintain ample stock levels despite weakened demand. The international market also played a role, with muted demand from Europe due to adverse weather conditions further contributing to the downward pressure on prices. However, a notable turnaround occurred in the final month of the quarter. Urea prices increased by 2.3% on a month-to-month basis, driven by the approaching peak planting season which stimulated renewed demand from the downstream fertilizer market.
Furthermore, China's ongoing absence from the fertilizer export market led to increased activity from Asian buyers in North America, enhancing regional demand for urea. This resurgence in demand, combined with shifting market dynamics, contributed to the price increase observed at the end of the quarter.
APAC
During the second quarter of 2024, the Urea market in the Asia-Pacific (APAC) region witnessed a notable decline of 1.8% in prices during the first month. This decrease was driven by several key factors that influenced market dynamics. One of the primary contributors to the price reduction was the easing of freight charges, which, coupled with an abundant supply of materials, exerted downward pressure on prices. Additionally, export restrictions imposed by major suppliers further limited market activity, creating an environment where supply outstripped demand. This situation was exacerbated by subdued demand from the downstream fertilizer market, as peak seasonal requirements had already been met, leading to reduced procurement activity. Moreover, the demand for Urea ammonium nitrate and other derivatives was also lower, contributing to the continued decline in prices. Adverse weather conditions, including heavy rainfall and snowstorms across various regions, negatively impacted agricultural activity, further reducing the need for fertilizers. Among the APAC countries, Japan experienced the most significant price changes during this period. Despite these challenges, Urea prices stabilized during the last two months of the quarter. The demand from the downstream market remained consistent, with only a few inquiries from the fruit-growing industry observed. Concurrently, Urea production began to recover at a healthy rate, resulting in a more balanced supply and demand dynamic by the end of the quarter.
Europe
During Q2 2024, the European Urea market experienced a marked downturn in prices, reflecting a broader trend of decreasing valuations across the region. Unfavourable weather conditions, including harsh windstorms and floods, significantly dampened agricultural demand, particularly in the fertilizer sector. This decline in demand was compounded by an oversupply of Urea, driven by ample inventories and smooth cargo inflows despite ongoing geopolitical uncertainties. Market participants reported a notable decline in fertilizer sales across Europe, a major factor driving this stagnancy. The adverse weather conditions disrupted agricultural activities, further reducing the need for fertilizers. Consequently, the Urea market faced substantial challenges, resulting in decreased prices and an overall bearish market sentiment throughout the quarter. Additionally, the ongoing geopolitical uncertainties contributed to market instability, as concerns about supply chain disruptions and potential trade barriers remained prevalent. Despite these uncertainties, cargo inflows remained smooth, exacerbating the oversupply situation. The industrial sector, which is a significant consumer of Urea for various applications, also showed reduced activity. This reduction in industrial demand, along with the subdued agricultural sector, led to a decreased overall uptake from downstream sectors.
MEA
The Middle Eastern Urea market experienced divergent trend during Q2. The prices declined during the first two months of the quarter and increased during the last month. The prices declined by 10% in April 2024 and 7% from the previous month owing lower netbacks on contractual shipments to North African and Asian markets over the past few weeks. This decrease in netbacks has further contributed to the downward pressure Urea prices in the region. As the quarter progressed Urea has witnessed a significant surge in Urea prices across the Middle Eastern and African (MEA) region, driven by a confluence of factors that have reshaped market dynamics. Key among these influences is the notable increase in production costs, primarily due to the rising price of essential feedstock natural gas Geopolitical shifts, particularly China's strategic decision to halt fertilizer exports to India, have intensified demand pressures as Indian buyers seek alternative sources within the MEA region. Additionally, limited spot availability and constrained supply chains have compounded the upward price trajectory. These elements collectively underscore an environment of heightened market volatility and reduced supply elasticity, contributing to the pronounced price escalation observed this quarter.
South America
The South American Urea market experienced mixed sentiments throughout the second quarter of 2024. Prices declined significantly during the first two months of the quarter but rebounded slightly in the final month. Overall, demand for Urea remained somewhat restricted. In Brazil, the harvesting of spring-planted crops, which constitute a smaller season, is currently underway. However, yields in the Southeast region have been significantly reduced due to earlier drought conditions and high temperatures. The larger summer-planted crop is also facing challenges, with irregular rainfall and high temperatures affecting certain areas. These adverse conditions have dampened farmers' enthusiasm for purchasing fertilizers. Various surveys indicated that sales were approximately 30% below expectations by the end of April. Farmers have been prioritizing the repayment of debts incurred from planting soybeans and off-season corn over acquiring fertilizers for the next planting cycle, further constraining Urea demand. Prices surged slightly in the final month of the quarter, but demand remained limited. A key factor behind the earlier price decline was a shortage of imported material in the Brazilian market. Statistical data from market participants revealed a significant decrease in the export of agricultural products via road transport during the last week of June 2024, with a 20% decline compared to the previous month. This highlights subdued demand and low trade activity in the sector, with approximately 188,000 tons of agricultural products exported across borders by the end of June 2024.
For the Quarter Ending March 2024
North America
Throughout the quarter, the North American Urea market exhibited a consistent bullish trend, albeit amid fluctuations driven by varying cost pressures on essential raw material Ammonia. These fluctuations, in turn, somewhat restrained Urea prices. Market sentiments were significantly influenced by factors such as international demand, freight charges, and prevailing trade uncertainties.
The absence of China from the fertilizer export market heightened activity among Asian buyers, particularly Indian buyers, in North America. This surge in demand was fuelled by preparations for the upcoming Kharif planting season within India. However, domestic fertilizer demand fluctuated as consumers stocked up for the impending spring planting season, dampened by inadequate planting conditions. Several plant shutdowns, including those of Agrium Inc. in Borger, Texas; Nutrien in Geismar, Louisiana; Koch Industries Inc. in Fort Dodge, Louisiana; CF Industries Inc. in Donaldsonville, Louisiana; and Nutrien in Borger, Texas, were reported during the quarter. Freezing weather primarily caused these shutdowns, exacerbating material supply shortages within the North American market. Furthermore, logistical disruptions along the Mississippi River impeded barge resupply until mid-March, resulting in delayed shipments and necessitating alternative routes at higher shipping costs. In response to these challenges and in a bid to safeguard profit margins, traders adjusted prices across various commodities, including Urea.
APAC
The pricing of Urea in the APAC region during Q1 2024 saw significant volatility, influenced by various market dynamics. Prices declined in the initial two months due to ample material availability and subdued seasonal demand. Favourable weather conditions and increased domestic production contributed to enhanced supplies, while sluggish demand from the fertilizer industry post-peak planting season further impacted prices. Moreover, international demand, especially from Asia, was constrained by Chinese government restrictions on fertilizer exports until 2024. By late February 2024, shortages of Urea emerged in the Chinese market, driven by equipment malfunctions and sales stoppages at production facilities, particularly in northern China. Operational challenges disrupted manufacturing processes and delayed Urea delivery, exacerbating supply shortages. Additionally, environmental regulations in Shandong province imposed further constraints on production, reducing Urea output. Despite supply challenges, domestic demand experienced a modest uptick as preparations for the upcoming wheat and barley planting season commenced. Henceforth a potential price surge, resulting in a marginal 1.1% increase in prices in March 2024.
Europe
Throughout the quarter, the European Urea market witnessed notable fluctuations in prices, characterized by initial spike followed by subsequent declines. The price surge of 8% during January 2024 in Russia was driven by a significant imbalance between demand and supply. International demand for Urea remained robust during this period, exerting further influence on market dynamics. Production activities within the European region encountered disruptions at the onset of the quarter due to freezing temperatures, resulting in a shortage of supplies in the market. However, as the month progressed, manufacturing units gradually resumed operations, albeit at a slower pace. In February 2024, prices embarked on a downward trend, persisting in decline throughout the quarter. This decline was predominantly attributed to broader trends indicating a waning demand, despite certain localized exceptions, particularly in the northern regions of Europe. A pivotal factor contributing to this demand shift was the prolonged and pronounced impact of heavy rainfall experienced in these areas. This extended period of precipitation effectively prolonged the ongoing season, consequently delaying the application of fertilizers, including Urea, and impacting market demand dynamics across the region.
South America
Throughout the quarter, the South American Urea market remained buoyant, notably impacting Brazil as the primary focal point. Price increases of 4.4%, 7.4%, and 1.3% were recorded in January, February, and March respectively, reflecting the prevailing optimism within the region. A significant factor contributing to this sentiment was the amelioration of prolonged drought conditions in Rio de Janeiro, facilitated by substantial rainfall. However, despite improved weather conditions, concerns persisted over the water level in the Panama Canal, which remained below the threshold level. Consequently, restrictions were placed on the size and number of vessels passing through the locks, resulting in a shortage of imported Urea cargoes in the Brazilian market. Furthermore, the commencement of harvesting for spring-planted crops, coupled with recent rainfall, spurred a resurgence in Urea demand. Favourable weather conditions also facilitated sowing for summer crops, further augmenting the demand. Despite this positive outlook, insights from market participants indicate potential reductions in the total sown area compared to the previous year, signalling a nuanced market landscape requiring careful navigation.
MEA
Throughout the first quarter of 2024, the Middle Eastern Urea market experienced notable price fluctuations, characterized by an initial spike followed by subsequent declines. The decline in prices during January was significant, attributed to weak demand both internationally and domestically, along with an oversupply of material in the market amidst trade uncertainties. The recent Red Sea attack further exacerbated the situation, driving ocean freight rates higher and raising concerns about inflation and delayed goods. To avoid potential strikes by Iran-backed Houthi militants, carriers diverted trade away from the crucial Middle East trade route, contributing to a complex global trade environment. This led Asian consumers to hesitate in making bulk purchases, resulting in increased Urea inventories within the country and a narrowed gap between demand and supply, supporting the current price dip. As the quarter progressed, prices continued to decline due to weak demand and producers ceasing to offer cargoes on a spot basis. Additionally, diminished demand from the East of Suez region and disruptions in the supply chain due to delayed shipments to the Asian market persisted amid ongoing harvesting activities and trade uncertainties. Insights from various market participants in late February reported a cargo ship's sinking in the Red Sea after being struck by an anti-ship ballistic missile, as confirmed by the US Central Command (CENTCOM).
During the first quarter of 2024, the Urea market in the Middle East and Africa region faced several factors that influenced market dynamics and prices. One of the key factors was the ongoing trade uncertainties and issues in the Red Sea region, which continued to disrupt the supply chain. This resulted in delayed shipments and higher shipping costs, narrowing the gap between demand and supply. Additionally, there were multiple shutdowns that caused disruptions in the market and led to increased prices.
Another factor that impacted the market was the subdued demand for Urea from both domestic and international markets. As the peak planting season had passed, buyers were hesitant to make bulk purchases, leading to downward pressure on prices.
In terms of country-specific analysis, the United Arab Emirates (UAE) experienced significant changes in Urea prices during the quarter. The market in the UAE followed a bearish trend, with prices declining due to diminished demand from domestic and international fertilizer markets. The ongoing issues in the Red Sea region further contributed to delayed exports and a surge in inventories at ports, exacerbating the downward pressure on prices.
However, it is important to note that there was a significant percentage change in prices compared to the same quarter of the previous year, indicating a decline in prices.
In conclusion, the Urea market in the Middle East and Africa region, particularly in the UAE, experienced a decline in prices during the first quarter of 2024. Trade uncertainties, subdued demand, and high availability of Urea were the key factors contributing to the downward pressure on prices. The quarter ending price of Granular Urea Ex-Jebel Ali in the UAE was USD 376/MT. The market also faced multiple disruptions, which led to increased prices.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, the North American Urea market experienced a decline influenced by multiple factors.
The pricing dynamics in North America during this period were shaped by subdued Urea demand, driven by concerns about potential drought due to the El-Nino effect. This led to cautious bulk purchases from consumers. Procurement orders from major international markets, particularly India, remained low as Indian consumers focused on the Middle Eastern market.
Insufficient rainfall disrupted the supply chain in South America, contributing to market challenges. Additionally, the bottleneck in the Panama Canal caused shipment delays and inventory accumulation within the country. Despite these challenges, Urea demand remained strong from the domestic fertilizer sector. Constraints at the Panama Canal compelled certain shippers to reroute Urea exports through the Suez Canal to access Asian markets. Therefore, some shipping companies opted to bypass the Suez Canal due to concerns about potential rebel attacks, choosing alternative trade routes. Persistent Suez Canal constraints may challenge Urea exports from the U.S., potentially leading to oversupply and reduced prices. Delayed shipments resulted in accumulated Urea inventories within the country, contributing to the decline of Urea prices.
APAC
The Urea market in the Asia-Pacific (APAC) region faced substantial challenges during the fourth quarter of 2023. Notably, there was a pronounced decline in prices, with China experiencing the most significant impact. Several factors contributed to this downturn, including the abundant availability of the material, persistently weak demand from the Asian region, and a decrease in feedstock prices. The cessation of fertilizer exports by China's National Development and Reform Commission (NDRC) resulted in a surplus of material in the market. Moreover, the conclusion of the autumn season diminished demand for Ammonium Nitrate in the end-user fertilizer market. Subsequently, Urea prices saw a notable increase. The escalation in the price of essential feedstock Urea led to higher production costs, exerting upward pressure on Urea prices. During this period, there was a shortage of imports from the European Urea market. The redirection of merchant ships from the Red Sea, driven by the imminent threat of attacks from Houthi militants off Yemen, resulted in a significant surge in freight charges as many shippers altered their shipping routes. However, demand from the substantial downstream fertilizer industry remained subdued, as the peak planting season had concluded.
South America
In the South America region, the Urea market witnessed a downturn in the fourth quarter of 2023 due to various contributing factors. Specifically, the Brazilian market followed a bearish trend during this period, characterized by subdued demand and a moderate to low supply. Despite the ongoing planting season for Rice, Sorghum, and Soybeans in the country, the demand for Urea from the crucial downstream fertilizer sector remained restrained due to adverse weather conditions. The northern part of Brazil experienced excessively hot and dry weather, worsening crop conditions. Simultaneously, the southern part had cooler temperatures initially, followed by a slight increase later. The divergence in weather patterns, featuring wet conditions in southern Brazil and drier conditions farther north, is primarily influenced by the persistent El Niño, expected to continue into early 2024. This has dampened the enthusiasm of fertilizer consumers for purchasing, given potential threats to crops. Despite these challenges, there was a smooth inflow of Urea shipments from the major exporting country, the USA, with no disruptions in the supply chain during this period. The interplay of these factors has resulted in a diminished gap between demand and supply, thereby contributing to the ongoing decline in prices.
Europe
The European Urea market prevailed mixed trend throughout the fourth quarter ending in December 2023. The prices increased by a slight margin of 1.1% in the initial month however declined later. The price increase in October was primarily driven by shortage of supplies in the European market. BASF, a prominent chemical producer in Europe, announced a reduction in production rates and the closure of several energy-intensive facilities, including two vital Urea plants and related fertilizer facilities. These factors have collectively resulted in shortage of supplies in the European market. However, later Urea prices declined amidst muted demand of the material from the European market and trade uncertainties. Adverse weather conditions within the region along with heavy rainfall posed to be a potential threat for the crops. This had further dampened the buying enthusiasm of Urea consumers for Spring 2024. Further, trade uncertainties amidst rebel attacks in the Red Sea had caused the traders to opt for alternative trade route. In an effort to avoid strikes by Iran-backed Houthi militants based in Yemen, carriers have already diverted trade over the past several weeks away from the crucial Middle East trade route, which, along with the Suez Canal, connects the Mediterranean Sea to the Indian Ocean. This has created a multiple-front storm for global trade, leading to a surge in European port inventories. The interplay of these factors prompted towards narrowed gap between demand and supply.
Middle East
In the Middle East and Africa (MEA) region, the pricing dynamics of Urea in the fourth quarter of 2023 were influenced by diverse factors. The Urea market initially displayed bullish sentiments for the first two months but transitioned into a downward trajectory as December approached. The price surge in the initial phase resulted from supply shortages, with a major Urea producer reducing production rates. International Urea demand increased during this period, particularly after China restricted fertilizer exports, contributing to an upward trend. In November 2023, the Middle Eastern market faced challenges due to factory device failures, partial sales stoppages, and constrained supply. However, as December arrived, demand from the Asian market declined post-peak planting season, and European market demand remained constrained due to adverse weather conditions and threats to crops from heavy rainfall. Trade uncertainties stemming from rebel attacks in the Red Sea led traders to seek alternative routes, diverting trade away from the crucial Middle East route and causing a surge in global port inventories. These factors collectively contributed to a narrowed gap between Urea demand and supply in the MEA region.
For the Quarter Ending September 2023
North America
The Urea market in the North American region initially followed an optimistic trend during the first two months of the third quarter. However, prices saw a significant decline in September 2023. The price increase in the first two months of Q3 was primarily attributed to the robust performance of the downstream fertilizer sector. Moreover, international consumers were actively building up their stocks in preparation for the upcoming winter planting season. Nonetheless, in July, the Urea market was impacted by low water levels in the Panama Canal, resulting in reduced exports of Ammonia from the USA to other importing countries. This led to an oversupply of Ammonia within the USA market. In August, the tightening availability of the material within the USA market became the primary driver behind the rising Urea prices. Hurricane Idalia disrupted production activities in the country, leading to a shortage of supplies. However, in September, the Urea market turned bearish due to weak demand from importing nations, particularly Brazil. Buyers' reluctance to make bulk purchases has exerted downward pressure on import prices, and this trend is expected to continue, thereby weakening the Western market.
APAC
Asian Urea market initially followed an optimistic trend during the first two months of the third quarter. However, prices saw a significant decline in September 2023. The price increase in the first two months of Q3 was primarily attributed to the robust performance of the downstream fertilizer sector. Moreover, international consumers were actively building up their stocks in preparation for the upcoming winter planting season. Further, the tight availability of the material within the Chinese market during August prompted a widened demand and supply gap within the country. Inadequate weather conditions and typhoons within the country had disrupted production activities in the country, leading to a shortage of supplies. However, in September 2023, Urea prices declined in the Chinese market. This decline was attributed to the ample availability of the material within the Chinese market. The Chinese government implemented a new policy that restricted fertilizer exports for the month, resulting in an excess supply of Urea in the market. Approximately half a million metric tons of Urea are currently stored at Chinese ports due to China's decision to limit exports of this essential fertilizer after prices surged. Further, one of the major Urea producers in China, Zhongnong Group, announced its decision to no longer enter into new urea export contracts. Other suppliers are also redirecting their Urea supply to the domestic market, which further limits exports and exerts downward pressure on domestic prices.
Europe
The European Urea market initially displayed an optimistic trend during the first two months of the third quarter, but it subsequently witnessed a significant price decline in September 2023. The price surge in the first two months of Q3 was primarily attributed to the strong performance of the downstream fertilizer sector. The Urea market in Russia experienced a substantial increase in prices as demand for Russian material, particularly for granular grade Urea, was robust within the EU. Prilled Urea also gained popularity among global importers. Russian manufacturers were initially focused on the US market due to the favorable local market conditions that benefited their margins. However, they have now expanded their reach to other parts of the world, particularly the UK and France, extending sales into September and October. These factors collectively contributed to the rising Urea prices in the country. However, in September 2023, the Urea market observed a decline in prices. This price reduction was primarily a consequence of an oversupply of Urea in Russia, a major European exporting country. Adding to the situation, the introduction of export duties, reaching up to 7%, on various fertilizers discouraged international buyers from making purchases from the Russian market. Consequently, Urea stockpiles accumulated within the country as foreign demand diminished. Furthermore, demand for Urea from the domestic fertilizer market proceeded at a moderate pace, which contributed to a narrowing gap between supply and demand.
South America
The Urea market in Brazil initially displayed a positive trend during the first two months of the third quarter. However, prices witnessed a significant decline in September 2023. The price surge in the first two months of Q3 was primarily attributed to the strong performance of the downstream fertilizer sector. During July and August 2023, there was a notable surge in the prices of imported Granular Urea. This increase in prices was driven by the significant growth in fertilizer consumption in Brazil, which has elevated the country's position as a leading player in the global corn export market. CF fertilizers, a key industry player, indicated that Urea and other fertilizer consumption in Brazil would remain robust throughout the year, thanks to an expansion in corn cultivation. Despite this positive outlook, data revealed a 9% decline in Urea imports in Brazil during the first half of the year. However, it is anticipated that these imports will rebound in the coming months as the favorable climate in the country encourages demand from the end-user fertilizer sector. Consequently, consumers have taken steps to bolster their inventories in anticipation of increased demand in the near future. Surprisingly, in September 2023, Urea prices experienced a decline. Consumers chose to adopt a cautious stance, postponing their Urea purchases in the hope of further price reductions. This cautious approach contributed to the downward trajectory in Urea prices. Economic challenges also hindered purchasing activities during this period, exerting additional downward pressure on prices. Moreover, the higher cost of Urea in the exporting country, the USA, dissuaded Brazilian buyers, exacerbating supply constraints in the domestic market.
MEA
The Urea market in the Middle Eastern region experienced a positive outlook throughout the third quarter of 2023. Several factors contributed to the increase in Urea prices, including the rising cost of essential feedstock, strong demand from both international and domestic fertilizer markets, and disruptions in the supply chain. The elevated prices of essential feedstock such as Ammonia and upstream Natural Gas prompted higher production rates, resulting in an upswing in Ammonia prices. There was robust demand for Ammonia, particularly from international markets like India and Brazil. In September, the tight supply conditions in the Saudi Arabian market led to a further increase in Urea prices. Ma'aden, a major producer of feedstock Ammonia in Saudi Arabia, temporarily shut down its No.1 plant due to technical issues. As a result, there is a shortage of spot availability in the Ammonia market as producers prioritize the fulfillment of supply contracts for the upcoming months of October and November. The limited supply of feedstock material in the Saudi Arabian market has led to a reduction in Urea production and exerted upward pressure on Urea prices.
For the Quarter Ending June 2023
North America
During the second quarter of 2023, pessimistic market sentiments prevail for Urea in the North American market. The decline was primarily driven by decreasing prices of its feedstock Ammonia and upstream Natural Gas, and according to data from the US Bureau of Labor and Statistics, the Natural Gas Index decreased by 2.6% in the month, marking the fourth consecutive decline in that index. Low water levels in the Mississippi River caused by high temperatures affected the exports from the USA to other countries. This consequently led to surplus availability of the material in the market. Further, consumers were hesitant to make bulk purchases amidst rising inflationary pressure and global economic slowdown. The collapse of two major banks in the USA also affected the demand. This led to a contraction in the market and further influenced the prevailing trend. However, due to the summer season, demand revived in the month of May by a slight margin but later tumbled in June. However, as indicated by the Federal Reserve of Economic Data, the Consumer Price Index of the USA has shown a marginal rise from 302.91 in April 2023 to 303.29 in May 2023 and is expected to increase further.
APAC
Throughout the second quarter of 2023, the prices of Urea showed a downward trend. The declining trend of Urea prices was primarily influenced by declining demand from the end-user fertilizer segment and declining prices of feedstock Ammonia and upstream Coal. Further, the lack of procurement orders from international markets, particularly India and South Korea, also impacted the prevailing trend. Backed by below-to-normal rainfall on a YoY basis, Kharif sowing tumbled by 8.4% in India, which further weakened the fertilizer market. Further, amidst rising inflation in the global market, China reduced its exports by 12.4% in June 2023. This, coupled with depreciating demand from the end–user market and availability of the material, paved the way for a narrow demand-supply gap. Thus, the traders were compelled to keep prices on the lower side. Additionally, as indicated by the National Bureau of Statistics China, the Purchasing Manager Index is declining and has been recorded at 48.8 in May 2023 after a marginal decline of 0.8% from the previous month, along with a decrease in industrial growth rate from 5.6 in April 2023 to 3.5 in May 2023.
Europe
The prices of Urea and other fertilizers have been grappling in the European Market for a prolonged period of time amidst the ongoing war between Russia and Ukraine. Further, growing inflationary pressure and economic slowdown have also impacted the demand. In an effort to curb inflation in the region, the European Central Bank has raised interest rates high. This has made the buyers hesitant to make bulk purchases. The prices of Urea in Russia have declined by 4.4% and by 3.5% in Germany from April to June. Further, a blast in the Ammonia pipeline in Russia has led to the surplus availability of feedstock Ammonia in the country. This, coupled with the healthy production rate, has created a situation of oversupplies in the country amidst declined demand from the end-user fertilizer segment. Further, as indicated by Eurostat, the Producers’ Price Index of the region declined to 138.3 in May from 143.4 in March and is expected to decline further. The average decline was 3.6%. Overall, the market situation for Urea remained bearish during this quarter, with low buying enthusiasm from the end-user fertilizer segment amidst growing inflation in the region.
South America
Imported Urea prices in Brazil declined throughout the second quarter ending June 2023. In June, the recorded price of Urea reached USD 314/MT from USD 320/MT in April on a CFR basis. The downward trend in prices was mainly attributed to the decline in prices of Urea and its feedstock in exporting counties, particularly China, and diminished demand from the end-user fertilizer market. Brazil has been experiencing a dry season this year since May 2023. This has impacted farming activities in many parts of the country, leading to low purchase activities from the fertilizer sector. Purchasing activities for fertilizers slumped by 16% in Brazil by the end of May 2023. Further, to curb growing inflationary pressure and global economic slowdown, the government hiked the interest rates. Thus, consumers were reluctant to make bulk purchases amidst the dry season and global economic slowdown. It was recorded that only 44% of the total material was sold. This, coupled with sufficient availability of the material in the market, paved the way for a narrowed demand-supply gap.
Saudi Arabia
Similar to the trend in the global market, the prices of Urea showcased a downward trajectory in Saudi Arabia in the second quarter of 2023. The prices declined by 9.5% from April to June this year on the back of weak demand from the fertilizer industry and declining prices of feedstock Ammonia and Natural Gas during this quarter. Additionally, it was observed that due to cheap shipments from the Russian Federation via the black sea to importing countries like India and Brazil, market participants of Saudi Arabia were forced to keep their prices low from April to June. The depreciating demand dynamics of the material in the market, coupled with ample availability of the material, have paved the way for a narrow gap between demand and supply. However, Saudi Arabia’s Investment and an Omani firm have signed a memorandum agreement of understanding to establish a fertilizer plant in the Kingdom to boost its agricultural production. The depreciating demand dynamics of the material in the market, coupled with ample availability of the material, have paved the way for a narrow gap between demand and supply.
For the Quarter Ending March 2023
North America
During the first quarter of 2023, steadily declining raw material prices had an effect on the price of Urea in the North American region. The early year fall in Natural Gas prices led to low feedstock Ammonia prices, which resulted in an oversupply of downstream sectors and consumers. Prices in the regional market have decreased because of diminishing demand and a decrease in offtakes close to the end of the quarter. US urea prices for the month of March rose to USD 420 per tonne FOB Illinois after falling in the first half of the quarter. A sole bright spot in the Urea market this week was seasonally adjusted as demand in NOLA (New Orleans and Louisiana), US, recovered, 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.
Asia Pacific
The price of Urea in the Asia Pacific region first rose and then fell in the first quarter of 2023 as a result of continually shifting raw material costs. In the first quarter of 2023, Urea prices increased somewhat in the APAC area. Demand purchase distribution has been drastically cut back. Price fluctuations for Urea compared to the relatively abundant supply from prior years. The Spring Festival this year was held quite early, and the chilly conditions remained afterward. Fertilizer production takes longer during the Spring Festival as a result, and demand is rarely met. Traders frequently purchase fertilizer when prices are low because they have more time to prepare it. The price of Urea has increased because of rising coal costs because coal is the main feedstock utilized by industries in China. Price estimates for Urea in Q1 were USD 473/MT FOB Qingdao.
Europe
In the first quarter of 2023, fertilizer prices significantly dropped in Europe. The price of Urea in European markets has decreased as a result of falling ammonia and nitrogen prices, decreasing input costs, and falling natural gas prices—all essential ingredients in the production of fertilizers. Some European countries continued to have high inventory levels, which reduced the region's need for imports. As a result of falling demand from the end-user fertilizer and melamine manufacturing industries, local urea producers cut the lower end of their prices. Worldwide, the supply of nitrogen fertilizers increased during Q1 while demand decreased. Prices in the European region were estimated to be USD 606/MT in January, but they dropped by 26.57% by the month's end.
For the Quarter Ending December 2022
North America
The price of Urea in the US market continued to decrease during the fourth quarter because of the sharp decline in the cost of raw materials. In the wake of unfavorable trading fundamentals and muted demand, the Urea price continued to decline. According to the statistics, feedstock natural gas prices fell by around 15% in November 2022, and this trend continued into December. Manufacturers were able to offer discounts to entice offtakes from downstream niche consumers as a result of the fall in feedstock costs, which had an impact on pricing patterns in major importing countries like India and the USA. Inflation in the country and drought conditions declined the production of Nitrogen in the domestic market. The labor shortage in the US market persisted, but the operational rate remained positive. Urea FOB Illinois prices were assessed at USD 742/MT, averaged in Dec.
APAC
Asia pacific region’s pricing trend for Urea in Q4 remained plunged due to a lack of demand from downstream fertilizer markets. There were great expectations for the requirement for Urea fertilizer during the rabi season in October in India; however, this demand remained low. Spot materials moved from the Middle East, Southeast Asia, and North Africa to Europe and Africa as a result of the lack of downstream Melamine industries’ demand in major importing countries like South Korea and Taiwan. Q4 2022 has historically been one of the weakest seasons for Urea pricing due to the decline in demand from industrial and agricultural clients in the APAC region.
Europe
Urea prices have shown mixed pricing sentiments throughout the Q4 in the year 2022 as the feedstock Ammonia has remained volatile due to fluctuations in Natural gas prices. Some nitrogen-based fertilizer manufacturing facilities in Europe have shut down as a result of rising prices for upstream natural gas. Additionally, the supply chain was in chaos due to conflicting opinions regarding freight prices and the limited number of available containers. In November, Russia raised the import quotas for all nitrogen fertilizers, which contributed to an increase in domestic supply. The downstream fertilizer market responded in a way that was consistent with the changing demand seen in the fourth quarter.
For the Quarter Ending September 2022
North America
Urea prices in the United States were falling in Q3 as upstream nitrogen values in the country were plummeting. According to sources, nitrogen values dropped by 30% in the international market. Prices also fell in the domestic market due to lower demand and fewer offtakes. In the U.S., demand from domestic buyers remained limited, as expected during the offseason. As a result, many dealers and producers there continue to concentrate on re-exporting possibilities. Meanwhile, it is anticipated that global supply chain disturbances will continue to influence the global fertilizer industry, and the situation between Russia and Ukraine is far from being resolved. Nevertheless, it is unlikely that exports will significantly expand under the existing inspection procedure.
APAC
Urea prices decreased in Q3 due to weak demand from downstream Melamine producers in the Indian market. Most domestic businesses, including the downstream fertilizer sectors, were in difficulties due to the country's extensive mobility restrictions. The prolonged war's impacts on the inflationary pressures in the world's economy also impacted domestic trading activities for several commodities, including Urea and derivatives. The price of Urea in China and the local market sentiment for Urea fell during the mid-quarter. Due to the sluggish purchasing tendency in the local market, the cost pressure from upstream Ammonia remained minimal. The price was further lowered by lackluster market demand for the feedstock Ammonia. The price of Urea was reported at USD 460/MT on a FOB Qingdao.
Europe
The cost of Urea in the European region rose in Q3 due to increased natural gas costs. Manufacturing was constrained because of the war's aftereffects on the European market. Natural gas, an essential component in the production of Urea and its derivative, has become more expensive due to the Ukraine crisis and shipping delays. Due to rising costs for the ammonia feedstock, urea prices climbed. Germany's inflation rate rose to 7.5% in July 2022. Energy prices climbed by 3% month over month due to higher feedstock ammonia costs. Germany saw a sharp increase in inflation from 7.5% in July 2022 to a new high of 7.9% in August 2022.
For the Quarter Ending June 2022
North America
Constantly Fluctuating raw material prices, the price of Urea in the North American region first surged and then declined in the second quarter of 2022. Initially, Farmers in North America have delayed purchases due to the worldwide nitrogen fertilizer scarcity and new high pricing. US urea prices for June hit USD 646 per tonne FOB Corn Belt. In April, local industries and downstream consumers were put under strain by higher feedstock Ammonia prices because of rising natural gas prices. Due to decreased demand near the end of the quarter, prices have also decreased in the domestic market.
Asia Pacific
Urea prices have seen a dramatic decrease in price during Q2 2022 in the APAC region. The Advance order prices fell by roughly 30% in June compared to May, but the mid-quarter price of Urea market price is still about 87% higher than last year's. In terms of supply, Urea's daily output remained high, and supply was adequate. The price of Urea has been supported by growing coal costs in China, as coal is the primary feedstock enterprises' operating rate declined by 3.94%. This month, the Urea industry's average operating rate fell by 1.15% to 73.81%. During June.
Europe
Fertilizer prices in Europe considerably declined in the second quarter of 2022. Subsiding Ammonia and Nitrogen prices, easing input costs, and lowering Natural gas prices, a vital component in producing fertilizers, have pushed down the price of Urea in European markets. Some European countries' inventory levels remained high, reducing import demand in the region. Due to decreased demand from the end-user fertilizer and Melamine manufacturing business, local producers of Urea lowered their prices on the lower end. During Q2, there were higher supplies and lower demand for Nitrogen fertilizers worldwide. During April, the Black Sea region prices were assessed at USD925/MT, which fell by 8% towards the end of the quarter.
For the Quarter Ending March 2022
North America
Urea prices in the North American region fluctuated in the first quarter of 2022. Initially prices of Urea tumbled, then later recovered. Wholesale U.S. prices for fertilizer plummeted during January, which was a sigh of relief for the downstream users including the farmers for the spring planting. Corn belt urea prices fell 8.2% in January to USD675 per ton, the lowest since last quarter of 2021. As the war situation intensified, soaring natural gas prices, pressurized Urea prices. Booming Inflation led to increasing prices in the region as the situation strengthened. Urea imports volumes in the region declined amidst the Chinese New Year. During the war situation as freight charges boomed, it impacted the supplies in the region.
Asia Pacific
Urea prices in the Asia-Pacific area remained elevated throughout the first quarter of 2022. The cost of fertilizer imports has increased significantly as a result of the worsening Ukraine crisis and Russia's blockage of supply routes. However, domestic urea output in India increased as a result of increased production from current production units. India has seen substantial supply constraints since the tension escalations between Russia and Ukraine in late February 2022. Russia, which produces around 13% of the world's fertilizer, is a major supplier of various fertilizers to countries including India. It temporarily halted fertilizer exports earlier this month, boosting already high fertilizer prices. After seeing the growing Zhengzhou Commodity Exchange (ZCE) in Henan, China, the Chinese authorities sought to restrain the inflationary tendency in markets in order to ensure orders and preserve price stability among Chinese Urea manufacturers. Because of increased coal prices and maintenance turnarounds at some urea plants, the price of urea has risen considerably. In addition, because India relies significantly on Chinese imports for Urea, a crucial producer, China's domestic market stockpiles have shrunk to meet export levels. Urea FOB Qingdao prices remained at USD443/MT in the first quarter of 2022.
Europe
Throughout the first quarter of 2022, the prices of Urea in Germany rose steadily. During the month of march, the price of upstream Ammonia has increased by 6% in the German market. Increase in price of fertilizers is primarily due to rising inflation in European countries. Furthermore, given the economy rebound, demand for Urea from the fertilizers and agrochemical industries has remained robust. The rise in Urea pricing is mostly due to the intensified Russia-Ukraine conflicts, resulting in a considerable increase in energy and Natural gas prices, which in turn is affecting the production costs adversely. In the European market, the raw material Nitrogen and Ammonia witnessed a significant shortage in the region. FOB Yuzhnyy (Black Sea) Urea prices have remained in a range USD748-805/MT throughout the first quarter of 2022. Meanwhile, Yara, one of the world's largest fertilizer makers, has curtailed ammonia and urea output in Italy and France due to the surge in natural gas prices.
For the Quarter Ending December 2021
North America
The price of Urea increased in the fourth quarter of 2021 in the North American region due to a significant increase in the price of raw materials. Due to the global shortage of nitrogen fertiliser, prices have reached new highs, prompting farmers in North America to postpone purchases. For the first time in December, US Urea prices reached USD 728 per ton FOB Cornbelt. Local factories and downstream consumers were put under pressure by rising feedstock Ammonia prices as a result of rising natural gas prices. Price increases were also aided by supply constraints in the United States at the end of the quarter.
Asia
Urea prices increased in the fourth quarter of 2021, owing to strong upstream prices ZCE Urea futures, which increased by a large percentage. Plant operating rates have increased, which has raised downstream agriculture demand, as well as industrial demand from downstream Melamine manufacturers. According to industry data, rising coal prices in South Asia pushed several provinces to ration electricity costs and fertilizer manufacturers to decrease production. The FOB Qingdao price increased to USD419/MT in December, while CFR JNPT rates od Urea were quoted at USD566.95/MT.
Europe
Fertilizer prices in Europe considerably improved in the third quarter of 2021.Higher feedstock Ammonia prices, growing input costs because of the energy crisis, and rising Natural gas prices, a vital component in the production of fertilizers, have pushed up the price of Urea in European markets. In addition, rising freight costs and a scarcity of shipping containers wreaked havoc on Urea prices this quarter. During Q4, there were low supplies and high demand for nitrogen fertilizers all throughout the world.
For the Quarter Ending September 2021
North America
In the North American region, the overall fertilizers market showcased mixed sentiments in the 3rd quarter of 2021. Q3 observed bearish sentiments for Urea in the US, where, in the first half of the quarter fertilizer industry observed a slump in consumption numbers after the spring season. Prices were assessed in late August at USD 424-450 per MT on FOB basis. However, as Q3 moved towards its conclusion, the Urea market gained strength as feedstock Ammonia started its uptrend due to surging Natural gas price which resulted in a substantial rise in Urea prices towards the end of the quarter.
Asia
The Asian market witnessed a significant rise in the prices of Urea during Q3 2021. Consistent demand for Urea was observed in the Chinese domestic market but the market noted low material availability. In the Indian market, shortage of fertilizers loomed on the back of high international pricing whose effects, may be felt during the coming rabi season. Lack of imports was largely due to the overall strong global agri-commodity markets, a temporary suspension of exports by China and western economic sanctions against Belarus.
Europe
During Q3 2021, fertilizers prices effectively increased across the European region. As natural gas is a key raw material for making nitrogen fertilizers such as ammonia, urea, and nitrates, etc., skyrocketing natural gas prices prompted multiple shutdowns of fertilizer plants in Q3. European gas prices soared to record highs on multi-year low storage levels and supply concerns, which led to increased Urea prices across the region.
For the Quarter Ending June 2021
North America
With the support of seasonal demand for several fertilizers, prices of Urea increased effectively during Q2 2021. The production level for Urea remained high in anticipation of firm offtakes, which surprisingly declined due to transportation issues. Domestic queries of Urea in USA were negatively affected as buyers preferred Urea from other countries like India due to price competitiveness. However, prices still rose due to firm demand, as the demand for crops like corn and soybeans remained very high. Thus, the prices of Urea were assessed at USD 540/MT for retail in USA during last week of June.
Asia
Firm sentiments for Urea were observed in Asian market during this quarter backed by sturdy demand fundamentals. High seasonal demand from domestic and international market increased the prices of Urea in India. Meanwhile, huge spike in price of DAP in India concerned the domestic farmers, where government of India urged manufacturers restrain raising MRP on Urea. Besides, China also experienced firm demand for Urea from domestic and international market during this quarter. In addition, IFFCO launched “Nano Urea” in Indian market, which is 10% cheaper than the conventional Urea and is aimed to decrease the overall input expenses of farmers.
Europe
Europe experienced firm sentiments for Urea during this quarter, backed by high seasonal offtakes and rise in cost of other fertilizers. Demand remained high enough to keep up the overall price trend across the region, supported by high feedstock Ammonia value. However, the overall price dynamic of Urea was controlled by India, as it is a major exporter globally. In addition, logistical issue across major ports exacerbated the overall price dynamic for Urea across the region.
For the Quarter Ending March 2021
North America
The North American region faced improved demand for Urea during the quarter, but due to the shortage of feedstock chemicals, prices remained high. Several feedstock Ammonia plants remained idled with several other production units across the gulf coast as an effect of winter storm. Ex-factory Urea prices at port Neal were reported around USD 415 per MT in March, showing gain of USD 20 per MT on month-on-month basis. After a long winter storm and trade disruptions, it is anticipated that till the end of the quarter prices would stop accelerating, as the production across the US gulf would progress towards supply restoration.
Asia
Urea prices across the Asian market rose consistently due to healthy improvement in demand from the domestic as well as international fertilizers market. During Q1 2021, prices in China suddenly surged due to partial lockdown activities amid surging daily COVID-19 cases, although it didn’t affect the production of Urea in the country, but road transportation and exports activities started facing trouble. Meanwhile, in the Indian market, demand for Urea improved compared to the prior quarter and limited supply supported its prices. In addition, sentiments were bolstered after the Indian government approved the grant of USD 13.44 million to sustain BVFCL (Brahmaputra Valley Fertilizers Corporation Limited) plant operations, having urea production capacity of 390,000 MT/year, to ensure timely Urea availability for farming sector in the north eastern part of India.
Europe
The European Urea market experienced stable domestic and international demand for Urea during Q1 2021. The international demand was initiated due to lower feedstock i.e. Ammonia output from the US market due to disturbed production and limited trade activities in the second half of the quarter, which supported the price rise across the region. Shipping container shortages and soaring freight cost also significantly impacted the price of Urea across several trading routes.
For the Quarter Ending December 2020
North America
Supply remained ample in Q4 due to ease in its demand on end of agricultural season in US. The overall pace of demand consistently decreased as harvesting came to an end, though Urea values remained in the favour of farmers. Early and further advancement of winter meant that there was sudden halt on additional fertilizing of fields and little to no space for early contract buying. Also, New Orleans (Nola) barge activity remained stable making market less attractive for imports.
Asia
Urea exports from China witnessed a major boost in the beginning of the quarter as the nation tried to fetch revenues by catering to the regional demand amidst its low availability in the local market. With onset of the Rabi season in India, demand for Urea observed a major spike in India. A leading fertilizer company based in India purchased nearly 2.18 million tonnes of Urea cargoes in October. India imported Urea from all major origins including Indonesia and Vietnam as producers gained better netbacks from India in comparison to the US or Brazil. Planned and unplanned maintenance was observed from producers in Malaysia and Indonesia. However, these incidents did not result in any major supply disruption across the region.
Europe
Rabi season in India also impacted the demand fundamentals of Urea in Europe as large volumes from various countries were redirected to India. There were no force majeures or shutdowns as European producers continued production without any hindrance and were able to meet the domestic demand. Due to poor harvesting activities, market uncertainty and financial concerns, the rise in Urea consumption in October were not as market expectations. November witnessed a slacked demand in the first half though demand picked pace towards the end.
