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
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.
