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Insights on the global urea market - looking back at April 2017

The urea market saw further softening in April, Egyptian producers suffered from a lack of demand in Europe, while delays in the season and oversupply affected NOLA prices.

Little interest for new tonnes in Europe continued to weigh on Egyptian producers, and as something had to give, Mopco agreed to sell 60,000 t granular urea at $195 fob, while OCI sold a total of 85,000 t also in the mid $190s fob. Drought conditions in some parts of Spain and France are expected to affect corn acreage and this is leaving importers hesitant to buy tonnes, while at the same time they also expect prices to come down further.

Brazilian buyers kept on the sidelines, usual for this time of the year when the focus is more on phosphates and potash, while recent high import numbers also suggest there is plenty of urea available locally. Incofe announced three tenders to close next week on 3 May, which will provide more clarity on how low producers are willing to go to sell and, with plenty of tonnes available both on prills in the Baltic as well as granular urea, the outcome is likely to show lower prices.

In Yuzhnyy, OPZ has indeed now switched off its remaining prilled urea line on the back of low prices. This is however expected to have little impact on Yuzhnyy prices as demand from the domestic market is slowing down, while on the export market sellers of Yuzhnyy tonnes face Egyptian competition in Turkey and Europe with a duty advantage.

Producers in the Arabian Gulf were on the positive side of the market mid-month, with around 155,000 t sold to MMTC in the tender, while 355,000 t was to come from Iran, as the counter offer of $229.50 cfr West Coast was accepted.

The Chinese however seem to have been the losers in the tender, with only a couple of cargoes sourced from there.

The AG also saw corrections, but producers are looking relatively more comfortable than producers in Egypt and the FSU owing to recent turnarounds and vessels committed to India. In China, a rebound on the domestic market prompted sellers on both the prilled and granular urea side to increase prices at the end of the month, but it will be difficult for producers of granular urea especially to keep prices stable let alone lift them in the current climate.

At the end of the month, the DOF was expected to consider issuing the next urea tender by 10 May or so for shipment beyond 19 May, likely for end June shipment on the back of a normal monsoon forecast and softening urea prices. However, considering India’s production, import and stock numbers, it looks like they will only need 400-600,000 t for June.

This monthly analysis is an extract from the World Fertilizer Review (May 2017), which is produced by highly experienced analysts who look at the market as a whole. The report is a monthly round-up of information on all the major commodities, including ammonia, sulphur, nitrates, potash, phosphate and more.

Download report chapter

Download your urea sample chapter from the World Fertilizer Review. 

As well as the comprehensive market overview, the review contains:

  • Published fertilizer price lists
  • Latest sales
  • Shipment information
  • News and company alerts
World Fertilizer Review | Agribusiness Intelligence

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