Views: 41 Author: Site Editor Publish Time: 2022-06-29 Origin: Site
Stimulated by the European gas crisis, market participants filled old short positions and established new long positions, so urea prices rose $ 100 / ton for the week.
Egypt saw the biggest increase in FOB prices, with the FOB price of granular urea over 110,000 tons jumping from $640/ton to $740/ton.
There is also an inflection point in U.S. prices, with urea prices rising by $50/t due to continued export demand, but Nora remains one of the lowest sourcing cost regions in the world.
Despite rising prices, Brazil continued to buy steadily this week as distributors continued to cover the massive inland short positions built up in recent months for the next season.
Demand east of Suez remains generally low, but traders did order over 14t of granular urea from Indonesia at $546-547/t fob this week.
European production costs
The cash production cost of granular urea is in the range of $800-900/t due to European spot gas prices above $40/MMBtu. Nitrate producers also face challenges from summer storage activities.
Regardless of mixed signals from Western governments on Russian sanctions, Chinese export restrictions, U.S. UAN punitive import tariffs or other influences, market intervention continues to disrupt trade flows.
30-60 Day Outlook
The market is well-supplied at the moment, but there is a risk of shortages if European nitrogen fertilizer producers choose to suspend production as reduced Russian gas supplies make fertilizer production unprofitable.