Global urea prices fall after gas prices

After several weeks of growth, prices for urea (the main nitrogen fertilizer) began to fall. From the end of April to mid-June, they rose by 26% to $313/t and continued to rise slowly. However, during July 11-18, FOB Baltica prices fell by 2% to 323 USD/t amid declining demand and significant stocks in some countries, as well as following gas prices.

According to the MMI agency, the urea market remains stable, but in some countries there is a decrease in demand. Thus, at the last tender in India, only 430 thousand tons of the fertilizer were purchased instead of 1-1.5 million tons expected by the market. The next tender is to be held in August. Europe is in the midst of the low season, while in the US demand is being pressured by falling grain prices and weather conditions. In addition, the major fertilizer importing countries have accumulated significant stocks.

Urea prices were not supported even by a sharp decline in exports by China, which reduced supplies by 86% year-on-year to stabilize domestic prices.

Until recently, urea prices were supported by a reduction in supplies from Egypt, which experienced a gas shortage in early June. However, the country has now resolved the situation by purchasing liquefied natural gas, so it will soon increase fertilizer exports, which will lead to lower prices.

According to the MMI, since mid-June, prices for ammonium nitrate on FOB Baltic have increased by 7.3% to $220/t. “Prices for nitrate are vulnerable to fluctuations in demand,” experts say. The market is currently waiting for the Indian tender for urea to determine further price trends.

Natural gas prices in the United States have fallen to almost a 4-year low amid significant inventories. As of July 19, US gas stocks were 8.2% higher than a year ago and 16.4% higher than the 5-year average.

In Europe, as of July 8, gas storage facilities were 80% full, while the 5-year average for this period is 70%.

Prices at the TTF gas hub (Netherlands) fell by 8.7% over the month to 31.75 €/MWh or $362/1,000 m3, which is 11% higher than last year.

Tags: prices, fertilizers