Global Urea Market Continues to Remain Muted Amidst Dwindling Demand
Global Urea Market Continues to Remain Muted Amidst Dwindling Demand

Global Urea Market Continues to Remain Muted Amidst Dwindling Demand

  • 05-Jun-2024 4:14 PM
  • Journalist: Shiba Teramoto

During the latter half of May 2024, the global Urea market exhibited a notable divergence in trends. Notably, the Asian Urea market witnessed a substantial surge in prices during the third week of the month, followed by a stabilized trend for the remainder of the period. Conversely, the Western Urea market maintained a predominantly stable to soft trajectory throughout the same timeframe. This variance in pricing dynamics can be attributed to fluctuations in the cost of essential feedstock such as ammonia. The fluctuating prices of ammonia exerted downward pressure on production costs within the Urea market, consequently influencing the overall pricing landscape. Furthermore, the reduction in demand from major downstream fertilizer markets, coupled with a decrease in planting activities, contributed to the overarching reduction in Urea market prices.

In the third week of May 2024, the Chinese Urea market experienced a notable surge, with prices increasing by 1.5% by the conclusion of the week on May 24th. This price upturn occurred despite a simultaneous decline in the cost of the essential raw material, ammonia. Despite the decline in ammonia prices, its impact on exerting cost pressure on Urea prices remained relatively contained. The primary factor behind this surge in Urea prices was a significant uptick in domestic demand within China's downstream fertilizer market. This surge in demand was particularly driven by the ongoing rice and cotton planting season across the country. In response to the firming prices, several major Urea producers took proactive measures to ensure the uninterrupted supply of Urea to the domestic market and stabilize sales prices. A group of over 20 key nitrogen fertilizer enterprises, including notable names such as Jinkong Equipment, Henan XLX, Hebei Dongguang, Linggu Chemical, Yuntianhua, Hualu Hengsheng, Hebei Zhengyuan, Shandong Ruixing, and Hubei Yihua, participated in this initiative. Their concerted efforts aimed to ensure market stability amidst the prevailing price surge. 

On the other hand, the stagnation of the European Urea market continued. Views from various market participants indicate that import activity has remained stable in Northwest Europe despite the recent increase in natural gas prices due to supply problems. Shipments from Algeria continued to arrive promptly, and availability of Urea was said to be good. In addition, the demand in additional processing sectors, especially in the fertilizer market, remained the same during this period. Constant weather problems in the region have worried farmers about the next sowing. Thunderstorms and heavy rain in Austria, Croatia, Hungary and the Netherlands until June 1, along with strong winds, thunder and possible hail, continued to dampen fertilizer-buying enthusiasm amid fears of possible crop damage and potential losses. However, despite the weather disruptions, Britain continued to plant. The combination of these factors helped to stabilize the price of Urea.

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