China reopens urea exports with $660pt price floor

The issuance of export quotas to individual urea producers and local distributors today heralds China's return to the international urea market.

Multiple local and international sources advise that several Chinese producers have received quota allocations for the June–August period, with precise details still emerging.

This comes alongside minimum price floors of $660pt fob for prilled urea and $670pt fob for granular urea — well above values in the local market, which reflect an equivalent of well below $300pt fob.

Total quota allocations are put at 1.5–1.6m. tonnes, with some suggesting an additional 400,000t may be permitted for government-to-government business.

As was the case last year, there has been no official communication from authorities, including the National Development and Reform Commission (NDRC), with quota details instead communicated directly to local suppliers.

Existing CIQ export controls and inspection requirements are expected to apply.

Last year, sales to India — by far the largest offshore market for prilled urea — were officially restricted, albeit cargoes were still supplied in major purchasing tenders. Latest reports suggest that direct business with India may now be permitted, but that minimum prices will be set $20pt above those for other markets.

Beijing has maintained a tight grip on exports of all fertilizers since the end of last year, as evidenced by the extension of controls to NKs in Q1, the ongoing strict management of phosphate exports, and persistent reports of inspection changes for ammonium sulphate (amsul) exports.

Having fallen close to zero in 2024, urea exports recovered to 4.89m. tonnes in 2025 — the largest volume committed offshore since 2021.

The international market response is likely to be tempered by China's minimum price targets. Such price floors have previously been revised when they have limited business, and some have interpreted the current floors as signalling China's target for the next round of Indian demand, which is expected to emerge soon.

The latest move comes following a sustained period of price pressure in the global urea market, with several major fob benchmarks now trading below $700pt. Beyond India, significant demand deferral and destruction has been evident since values hit multi-year highs in April.