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US Ends Support For Urea Prices Amidst Uncertain Demand Dynamics
US Ends Support For Urea Prices Amidst Uncertain Demand Dynamics

US Ends Support For Urea Prices Amidst Uncertain Demand Dynamics

  • 11-May-2023 6:23 PM
  • Journalist: Shiba Teramoto

The Urea market has been split this week, with the eastern region being weak and the western region being largely stable or strengthening. The cost of Urea in the United States is no longer high compared to other places, and the recent trend of increasing prices for the past three weeks has ceased, indicating a global deceleration in other regions.

The cost of New Orleans And Louisiana (NOLA) barges dropped to $315 per tonne FOB in the second week of May, a decrease of $25 per tonne of Urea. According to the seller, even the importer who quoted the June products was nowhere to be found. The Urea market in Southeast Asia is still robust, despite industrial closures and high seasonal demand in several nations.

The Brunei Fertiliser Industry sold a limited quantity of commodities at $340 per tonne FOB in the sales bidding in Indonesia, where the highest quote for the second half of May was $330 per tonne FOB. The market in the region is being further supported by the fact that some importers are looking to ship in May or early June.

Strong Urea order demand in May and big manufacturing shutdowns are two market variables that may support the price curve's upward trend. Short-term supply is also tight due to these causes. Additionally, there is a general lack of optimism among traders as a result of the downturn in US demand and the obvious lack of interest from importers in commodities arriving beyond May.

Overall, Urea production appears to be highly optimistic about the May shipments. The target market's price may be low before the FOB Urea price adjustment. There has been no further increase in American prices, and suppliers holding stock positions are now moving quickly to locate clients before the river closure prevents goods movement into the Corn Belt for a few weeks.

Traders are aware of how increased Chinese Urea shipments would affect the global supply-demand balance and the downward pressure on pricing that will follow. Daily decreases in domestic Chinese Urea consumption mean that more Urea is being exported.

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