Urea Market Report
At the beginning of this week, urea prices stabilized at lower levels after the sharp decline that followed the offers in India’s tender. However, on Thursday, prices turned upward in most markets.
In North Africa, prices increased above $430/t FOB Egypt, while other markets remained mostly unchanged. After some hesitation, India’s NFL purchased 2.03 million tons of urea in its September 2 tender at $464.70 CFR west coast and $462.45 CFR east coast. Early in the week, expectations of an increase to around 2.5 million tons supported the market floor, but ultimately India bought only the initially intended 2 million tons, likely due to port congestion concerns. Finalization of India’s purchase on Tuesday evening triggered a wave of short-covering in some European markets. Meanwhile, Dangote in Nigeria finalized more contracts for this month’s loadings.
Egyptian granular urea prices rose again today, reaching $447 FOB. European demand remains strong, with steady trade across the continent. Key drivers of European buying include the clarification of India’s tender, distributor short-covering, and concerns about CBAM premiums next year.
This rapid price increase was mainly limited to North Africa, while other markets remained weak. In Brazil, trades were done up to $435 CFR. However, concerns over purchasing power and falling ammonium sulfate prices continue to pressure the urea market. Additionally, higher Iranian stock levels, with expectations of allocation to Brazil, created further downward pressure this week.
Market Highlights
- Egyptian granular urea traded up to $447 FOB into Europe.
- Granular urea liquidity in Brazil increased at $430–435 CFR.
- The U.S. barge urea market rebounded after its recent decline.
Weekly Price Comparison (Sept 11 vs Sept 4)
| Origin / Destination | Sept 4 ($/t) | Sept 11 ($/t) | Change |
|---|---|---|---|
| Urea prilled – FOB Black Sea | 410–425 | 390–408 | ↓ $15–17 |
| Urea prilled – FOB Baltic | 395–420 | 390–405 | ↓ $10–15 |
| Urea prilled – FOB Middle East | 435–450 | 425–435 | ↓ $10–15 |
| Urea prilled – FOB China | 415–430 | 390–403 | ↓ $25–27 |
| Brazil (CFR) – prilled | 420–440 | 420–425 | ↓ $15 (upper cap) |
| Southeast Asia (CFR) | 415–430 | 435–445 | ↑ $15–20 |
| India (CFR) | 462–465 | 462–465 | Steady |
| Urea granular – FOB Egypt (to EU) | 450–475 | 425–447 | ↓ $25–28 |
| Urea granular – FOB Algeria | 430–480 | 413–450 | ↓ $17–30 |
| Urea granular – FOB Nigeria | 415–440 | 400–415 | ↓ $15–25 |
| Urea granular – FOB Iran | 380–392 | 375–390 | ↓ $2–5 |
| Brazil (CFR) – granular | 440–460 | 430–435 | ↓ $10–25 |
| Argentina (CFR) | 465–485 | 460–465 | ↓ $5–20 |
| Mexico (CFR) West | 465–475 | 455–465 | ↓ $10 |
| USA – Gulf barge | 401–410 | 398–409 | ↓ $1–3 |
| France (FOB) | €420–450 | €405–417 | Noticeable decline |
Economic Analysis
1. Price declines across most supply origins:
This week, major exporting hubs (Egypt, Iran, Algeria, Nigeria, Black Sea, and China) recorded price drops of $10–30. This reflects supply-side pressure, particularly with Iran’s higher inventories and concerns over global demand.
2. Role of the India tender:
Although India’s Sept 2 tender temporarily stabilized the market, the final purchase volume (2.03 million tons vs. an expected 2.5 million tons) fell short, preventing sustained price growth. As a result, after a short-lived rebound, the market moved back to lower equilibrium levels.
3. Europe as an exception:
Unlike other regions, Europe remains an active buyer due to concerns about CBAM carbon border tax implementation and the need to cover immediate commitments. This kept Egyptian-to-Europe prices slightly firmer than other routes.
4. Weak demand in Brazil and Latin America:
Weaker purchasing power and downward pressure from falling ammonium sulfate prices dragged Latin American markets lower. However, Brazil will likely remain the main destination for Iranian urea, with incoming Iranian cargoes expected to cap the price ceiling further.
5. Short-term outlook:
- Supply side: Higher Iranian exports and Nigerian (Dangote) activity will create downward pressure.
- Demand side: Europe remains a temporary price driver, while Brazil, Mexico, and Argentina are weaker.
- Result: In the coming weeks, global urea prices are expected to fluctuate in the $400–430/t range for granular and $380–400/t for prilled, unless India announces another tender.
Dr. Nader Salak
www.Ghlolo.com
