International urea market

Differentiation of Urea Market between East and West

 

This week, the urea market experienced differentiation, with most markets east of Suez being stable or even stronger, while the western market was relatively weak.

 

The price of large granular urea in Brazil fell by $30 per ton this week, as traders sought immediate circulation of goods, while the price in the US Gulf only fell by $10 per ton.

 

The FOB prices in North Africa have also significantly decreased, and the offshore trade level between Egypt and Algeria has decreased by at least $50 per ton. The trading volume in the previous few weeks has been low, and most of the goods loaded in September are still unsold.

 

However, manufacturers in China and Southeast Asia are generally guaranteed, as prices have stabilized or increased this week due to insufficient supply in September. Indonesia sold to Australia at FOB392 USD/ton, an increase of approximately $20 USD/ton compared to last week's Malaysia transaction, while China's small particle bid was as high as FOB380 USD/ton.

 

market factors

 

Short term supply: Sellers in the Black Sea, North Africa, Nigeria, Iran, and Southeast Asia have large unsold positions and will ship around September.

 

The decline in urea prices: The sharp drop in urea prices not only hinders buyers from purchasing urea, but also makes the prices of ammonium nitrate and ammonium sulfate appear high, thereby slowing down the trade of these products.

 

30-60 day outlook: instability

 

Although the short-term trend remains weak, supply in Nigeria and Southeast Asia has returned to normal, exacerbating the contradiction of sluggish demand in most parts of the northern hemisphere. But urea prices have seen a significant pullback, and as the fourth quarter approaches, energy concerns and rising demand should stimulate a market recovery.