Urea International: price rise
Source: Zhongyu information time: September 17, 2021
Urea price rise
Driven by record natural gas prices, some European factories closed, leading to a sharp rise in FOB prices in Egypt in the middle of the week. The price increased by 35 USD / T within 24 hours and reached 520 USD / T FOB at the time of writing this article, but it is still rising.
It is reported that the United Kingdom, Lithuania, Ukraine, Spain and other countries are reducing production. If the natural gas price remains at the current level (US $22-23 / million BTU), other countries may follow suit. All European nitrogen fertilizer producers are evaluating their positions on a daily basis.
Due to possible government restrictions and the reluctance of urea suppliers to deliver in October, China’s low production may lead to a supply shortage in India in the fourth quarter.
India has not yet issued the next round of urea bidding, but may buy Urea delivered in October, and needs to buy in large quantities.
The price of urea in the United States continues to be higher than US $500 / T FOB Nora, equivalent to US $550-560 / T CFR, easily leading the Brazilian market. The quotation in the Brazilian market this week has risen to US $520-540 / ton CFR, although there is little buying.
Natural gas price
Tight supply in Europe and competitive demand for LNG in Asia have pushed natural gas prices to levels that fertilizer producers cannot afford.
Skip September, India now needs to buy 5 million tons in three months.
The threat of production reduction and export restrictions suggests that China’s urea exports may decrease in the fourth quarter
30-60 DAY outlook
If you are a buyer, don’t wait any longer. Prices are rising as Europe, Brazil and India enter the main buying season.