Urea International: narrow decline in international market

Urea International: narrow decline in international market

Source: Zhongyu information time:  August 21, 2020

Earlier this month, India’s rapid bidding did not stimulate the enthusiasm of the market. As buyers continue to extend the current quotation level, most prices fluctuate or fall in a narrow range.

India’s continued demand is now seen as a new normal rather than a special market phenomenon. With the market’s renewed focus on export sales, China’s FOB fell slightly to US $260 / ton. The response of major Western markets was tepid, with limited sales of CFR, while Brazilian buyers still resisted the CFR price of $290 / T.

The fundamentals have not changed, but the psychology has changed, because China’s supply is sufficient and the price is more negotiable. India centric demand should be sufficient to sustain prices, but further increases will be limited in the short term.

India

As high domestic sales continue to erode inventory, bidding will become a norm in the market

China

As domestic demand stagnated, suppliers were forced to export. Lower prices may determine India’s price level until domestic demand recovers

Brazil

The stalemate lasted another week, but the rise in seasonal demand will require more purchases later in the quarter

Outlook:

The absolute level of Indian demand should prevent significant adjustments in the short and medium term.

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