Subject: Future Market Analysis of Urea

---

Analysis of the Future Urea Market for the Two-Week, One-Month, and Three-Month Horizons

Next Two Weeks

• Global Situation: In the short term, the global urea fertilizer market remains affected by Middle East tensions and export restrictions. Iran and Egypt had temporarily halted production following recent attacks. Although gas exports have partially resumed, a full production recovery will take time. Furthermore, approximately 52% of global urea exports originate from the Persian Gulf region, and any escalation in tensions could severely reduce supply. Conversely, the partial release of China’s export quotas has contributed to relative market calm, but global supply remains fragile. Consequently, prices will remain at current high levels with high volatility over the next two weeks.
• Iran: Iranian urea producers are gradually restoring production after recent disruptions. Iranian export urea was offered at a base price of $420/ton FOB but saw limited demand. Iran’s annual production capacity is about 9 million tons (with exports of about 4.5 million tons limited by US sanctions). In the next two weeks, Iranian companies will likely focus on supplying the domestic market and capitalizing on high global prices.
• China: China’s urea export process is accelerating. This change is mainly due to the end of last year’s shortage and the potential for further quota releases. Experts expect significant exports to continue until September. Therefore, new supply from China will help prevent sharp price increases in the next two weeks.
• India: Indian state-owned company NFL recently issued a tender to import 2 million tons of urea, valid until September 2nd. This indicates high immediate demand in India to meet the needs of the autumn season.
• Europe: In Europe, the first phase of the €40 tariff on nitrogen fertilizer imports from Russia and Belarus has begun. This tariff has reduced the competitiveness of Russian fertilizers and increased imports from North Africa and the Middle East, although sufficient supply remains in the short term.
• Brazil: Brazilian farmers are generally delaying urea purchases for the planting season. Despite high global prices, most of Brazil’s needs will be finalized in the coming months. Significant imports are not expected in the short term.

Conclusion: Over the next two weeks, we should mainly see price stability or a slight upward tendency.

Next One Month

• Global Situation: The global urea market will be influenced by a combination of demand and supply pressures over the next month. Reduced farmer purchasing power provides grounds for a gradual decrease in demand. Any progress in Chinese exports could strengthen supply.
• Iran: Domestic urea production in Iran has stabilized. The Iranian government may attempt to manage export quotas; however, if external demand pressure remains high, Iranian exporters will continue to focus on alternative markets.
• China: China continues its plan to reduce export restrictions. China’s urea export ban is expected to gradually end by October 2025.
• India: Following the NFL tender, India will load shipments between October and November to prepare for the winter planting season.
• Europe: In the coming months, Europe continues to prepare for the full implementation of CBAM (Carbon Border Adjustment Mechanism). The current €40 tariff has made imports from Russia more expensive, making Europe more reliant on imports from North Africa and the Middle East.
• Brazil: Demand from Brazil for urea is largely postponed to later seasons. Major Brazilian purchases are forecast for October to November.

Conclusion: Over the one-month horizon, a slight reduction in volatility is possible, but the market will still be influenced by fundamental factors.

Next Three Months

• Global Situation: Looking three months ahead, the outlook for the urea market can be described as challenging. Overall annual demand in various regions remains steady. The easing of external sanctions, such as the full liberalization of Chinese exports and increased exports from other producers, could somewhat reduce supply pressure.
• Iran: Urea production in Iran will near its maximum capacity to compensate for past shortages. Banking sanctions and potential regulatory policies may limit exports.
• China: China’s urea export quota will likely be exhausted by the end of December 2025. Supply from this country will decrease, and other exporting countries will have a larger market share.
• India: If the “zero urea imports by end of 2025” policy is realized, India’s import demand will sharply decline in the latter half of the year.
• Europe: Over the next three months, Europe will not have a fixed rate for urea prices, and domestic markets will be more influenced by underlying costs and climate policies.
• Brazil: Final urea purchases for the second corn season will be postponed to next year. Brazilian farmers are closely monitoring the global price situation.

Summary: Over the three-month horizon, the global urea market will likely remain under pressure. The price trend for urea in the coming weeks will be bullish or at least volatile, and farmers and producers will make decisions cautiously.