For the Quarter Ending December 2024
North America
The North American Urea market demonstrated fluctuating price trends during Q4 2024, reflecting stability in November and December after experiencing a marginal surge in October. The price remained stagnant initially, despite fluctuating feedstock costs for Ammonia, Nitric Acid and Ammonia. Subdued seasonal demand from the fertilizer sector contributed to the lack of price movement, with agricultural activities declining as the planting season faded. However, demand for industrial applications, particularly in mining and explosives, remained steady, supporting market resilience. On the supply side, logistical challenges such as adverse weather, hurricanes, and low Mississippi River water levels constrained production and imports. Persistent bottlenecks, including a labour strike in Canada, further limited supply availability, though effective inventory management mitigated severe shortages.
However, in October, slight supply tightness coupled with a modest rise in feedstock prices led to a gradual price increase for Urea. Despite consistent industrial demand, purchasing activity for fertilizers remained cautious, with buyers delaying significant commitments in anticipation of more favourable pricing during winter fill and spring prepay periods.
Overall, Q4 showcased a balanced interplay of demand and supply, with steady industrial consumption offsetting seasonal agricultural weakness and supply chain constraints.
Asia-Pacific
Asian Urea prices exhibited pronounced volatility throughout the final quarter of 2024. Prices escalated during the initial two months, driven by robust international demand, particularly from India, which placed significant pressure on regional supply levels. In China, logistical challenges such as severe port congestion at Shanghai and Ningbo, coupled with heavy rainfall and rising freight costs, further exacerbated the price surge. Supply chain disruptions were intensified by vessel bunching and prolonged waiting times, compounding market tightness. Adverse weather conditions across the southern Asia-Pacific region, including typhoons in China and Japan, led to substantial production disruptions. Excessive rainfall forced several manufacturing facilities to declare force majeure, resulting in reduced production output and a notable Urea shortage in the region. Despite these challenges, prices declined toward the end of the quarter due to subdued year-end purchasing activities. India, a key fertilizer consumer, had fulfilled most of its requirements through contractual tenders, leaving minimal spot market demand. This drops in purchasing activity eased price pressures, stabilizing the market.
Europe
European Urea prices have experienced a decline due to weak demand from key sectors such as agriculture, compounded by oversupply conditions and logistical disruptions. Despite rising Ammonia feedstock costs and supply constraints, including the shutdown of a Norwegian gas platform, production levels have been curtailed. However, ample inventories continue to exert downward pressure on prices. In the UK, a notable price surge occurred in December 2024, primarily driven by supply chain disruptions and delays in exports from significant European suppliers. Despite this, buyer interest remained inconsistent, with fluctuating weather conditions playing a role in shaping demand patterns. In both Europe and the UK, demand has remained weak, with the agricultural sector showing cautious purchasing behavior. This is further exacerbated by uncertainties surrounding the upcoming winter planting season and ongoing logistical issues, such as port congestion. These dynamics highlight a market under strain, where supply is outpacing demand, and economic factors like high input costs and unpredictable weather continue to influence future price trends.
South America
The South American Urea market, particularly in Brazil, has recently seen a notable price surge during Q4. This upward trend is largely attributed to a widening gap between supply and demand, driven by the El Niño phenomenon, which brought milder weather and prompted increased fertilizer purchasing activity. The agricultural sector's preparations for planting seasons have further sustained demand for Urea, essential for fertilizers and industrial applications. On the supply side, global challenges have significantly tightened Urea availability. Reduced exports from North America, particularly Canada, due to logistical disruptions, and modest contributions from the U.S., have exacerbated the constrained supply outlook. Additionally, elevated natural gas and Ammonia prices, critical Urea feedstocks, have increased production costs globally, with these expenses reflected in Brazilian import prices. Logistical issues, including shipping delays and rising freight costs, have further amplified the cost burden for Brazilian buyers. Given Brazil's heavy reliance on imports, Urea prices are expected to remain elevated unless supply conditions improve or feedstock prices stabilize.
MEA
The price of Middle Eastern Urea exhibited volatility during Q4 2024, with notable price increases observed in the first two months of the quarter. This surge was driven by volatile freight charges, reduced availability of imported material, and steady yet moderate downstream demand. Maintenance activities at Ma’aden, both planned and unplanned, significantly impacted export availability, reducing output by approximately 96,000 tons. This prompted a revision of the company’s 2024 production target to 3.0–3.2 million tons of nitrogen based fertilizers slightly down from the previous forecast. This adjustment, reflecting a 6% - 7%% supply decline, underscored the impact of these disruptions on Urea availability across domestic and export markets. Firm demand from key importing markets, particularly India, further supported the need for sustained exports. Major producers in Saudi Arabia, including Sabic Agri-Nutrients and Ma’aden, were projected to load a combined 250,000 tonnes during the quarter’s initial months. However, prices declined towards the quarter's end as subdued year-end purchasing activities eased market pressure. India, having secured most of its fertilizer needs via contractual tenders, contributed to the reduced spot demand, stabilizing prices.
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.
