Based on available data and current developments, the future market analysis of urea (especially granular urea) on a global scale is summarized and categorized as follows.
Dr. Nader Salek
⸻www.Ghlolo.com
1. Overall Market Trend:
The global urea market is in a phase of redefining supply and demand equations. The limited return of Chinese exports (with quotas and restrictions) and the exclusion of India from export destinations are the main variables affecting the market outlook.
2. Key Factors Influencing the Market:
A. Chinese Export Policy:
• The National Development and Reform Commission (NDRC) of China has announced that urea exports are permitted from June to September, but with restrictions.
• India, a key importer, has been excluded from these exports, reducing demand pressure on China and increasing the likelihood of supply saturation in other markets.
B. Market Behavior:
• The market faces cautious buyers, with many transactions suspended.
• Sellers have also refrained from extensive trading until quotas are clarified.
C. Prices:
• Middle East and Iran: The FOB price of granular urea has reached approximately $330/ton, indicating a decline.
• China: Price offers are ranging between $360 to $375/ton FOB.
• Brazil: CFR rates have dropped to about $360/ton, significantly down from the peak of the year.
• U.S. Gulf: Price pressure has become evident, with prices decreasing to $462 to $465/ton.
3. Future Market Analysis of Urea
A. Short-Term Outlook (Next 10 Days):
• The market will remain in a recessionary and downward trend.
• Given the uncertainty in China’s export policy, prices are likely to temporarily stabilize at lower levels.
B. Medium-Term Outlook (Next 30 to 60 Days):
• Although the resumption of Chinese exports may help achieve relative balance in supply, India’s absence will continue to exert downward pressure on prices.
• There is a possibility that the corrective price trend will continue until new levels stabilize.
4. Operational Recommendations for Market Participants:
• Buyers: Avoid heavy entry into the market and closely monitor China’s export trends.
• Sellers: Considering the downward trend, offer competitive price proposals while managing supply risks.
• Investors and Traders: Keep the market under close observation until China’s specific policies are clarified.
5. Price Index (PDI):
• The global urea price index (PDI) has experienced a slight decline (approximately -0.17%), indicating the beginning of a gradual pressure period on prices.
Dr. Nader Salek
⸻www.Ghlolo.com
