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.
