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
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.
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.
