Egyptian urea values lose ground as European buyers unfazed by gas woes

Egyptian granular urea producers have had little choice but to lower quotes this week in an attempt to entice buyer interest after several weeks of thin liquidity. Still, even the possibility of supply disruptions due to gas cutbacks has failed to stimulate demand for Europe, with traders and importers alike focused on clearing stocks.

Earlier producer price targets of $535pt fob for granular urea have had little success since late-October, with producers revising quotes down to $520-525pt fob this week. Still, bid interest has been incredibly thin with traders placing earlier booked positions into Europe in the range of $500-510pt fob, though some have pointed to slightly higher levels for small volumes. 

Three Egyptian nitrogen producers have seen their gas supply cut by a third since 8 November, while other producers continue to face the 20% reduction initially implemented the week prior.

Mopco and Abu Qir have confirmed they are facing 33% gas reductions but say they are adjusting operating rates to work with the available gas. Egyptian Fertilizer Company is also understood to be facing similar cuts.

Abu Qir has indicated that two of its three plants can continue operating at full capacity by redistributing gas supplies across its production units, while also rescheduling maintenance.

Kima and Alexfert, both facing 20% gas reductions, have also reported adjusting operations to available gas supplies.

Producers have yet to quantify the impact on overall output, and it remains unclear how long they can maintain current production under the reduced allocations.

The current gas supply restrictions in Egypt differ from previous disruptions in that they have occurred later in the year and have been primarily driven by the rising cost of imported natural gas, rather than a temporary interruption to imported gas supplies or seasonal maintenance.  

Declining domestic production, the loss of Israeli gas flows following the outbreak of the Iran war in February 2026 and higher international LNG prices have increased the cost of securing sufficient gas to meet domestic demand.

Previous restrictions have generally occurred during Q2 and Q3, coinciding with peak summer electricity demand due to extreme heat. For instance, the government imposed a 30% production reduction on Abu Qir and Mopco in May 2025, in addition to more severe disruptions in June-July 2024, when several manufacturers temporarily suspended production altogether.

However, restrictions have also occurred in Q4, notably in October 2023 following the suspension of Israeli gas exports.

Typically Q4 would see an uptick in demand for Egyptian granular urea from Europe with interest peaking in Q1. However, European risk appetite is low in the current geopolitical environment, leaving distributors unmoved by the latest Egyptian gas woes.