Urea International: mixed
Source: Zhongyu information time: February 26, 2021
Freight is the main topic in the market this week. After the sharp rise in freight charges last week, the current freight quotation from the Middle East to Brazil is $38-40 / ton, twice that at the beginning of the year. The resulting volatility and uncertainty are hindering new sales of urea.
Oil prices in Egypt and the United States rose, but oil prices in other regions remained stable. Egypt in particular benefited from strong demand from Turkey, while the United States needed to buy a large amount of granular urea before it could arrive in Egypt by May. After the closure of natural gas related plants last week, factories in the United States are restarting, but more imports are needed to make up for production losses.
In other regions, the demand outlook in 2021 is very favorable. Global food cultivation is expected to increase due to attractive prices. It all depends on the weather, but optimism is still everywhere.
High wheat and corn prices are leading to higher planting expectations in the United States, Brazil, China, Europe and Australia
The lost output of 100000-150000 tons of urea was added to the import requirements in March / April
Suppliers are not in the mood to give up a lower FOB price to compensate for the rise in freight – the cost and freight price is bound to rise
Many regions remain stable, but the FOB level may rise slightly in March, which may affect North Africa and the United States