Urea International: future prospects
Source: Zhongyu information time: February 5, 2021
Urea prices in most key markets rose further this week as demand continued to exceed export supply. In April, the price of Egyptian granules rose another $10 to $380 per ton FOB, the highest level in more than six years. Brazil’s demand continued to exceed expectations, pushing up the price to $390 / ton CFR, the highest level since 2014.
Despite the lack of price support from the local market, suppliers east of Suez led the price increase. Indonesia’s granular urea and granular urea increased by US $38 / T and US $33 / T respectively every week. The price of granular urea in China rose to close at 370 USD / T from 340 USD / T FOB at the beginning of this week.
Despite the adverse news of the decline in the US market and the postponement of bidding in India, global stock markets rose. This shows that, at least for now, support for the upward trend remains firm, and this support is multifaceted.
The prospect of spring in China is promising
Suppliers are optimistic, and domestic consumption is expected to be very high in spring. China’s domestic prices rose before the Spring Festival holiday, supporting this position.
Latin America supports price increases in Asia
Strong demand and prices attracted a large number of Asian buyers, pushing up prices in the process. Local prices lag, and importers also feel the pressure.
Demand delays in India
High international prices seem to have persuaded the US Treasury to postpone the bidding announcement. This indicates that it is more likely to need to ship in April than in March
Overall demand remains healthy and should support the market in the short term. However, if the US economy continues to weaken, it may cause some concern.