Index drops 6 points in two weeks as urea market experiences price correction

• Urea market price correction sees six point fall in Nitrogen Index
• Buyers in the West hold back, putting pressure on prices
• India secures record volume of urea through recent tender
• Concerns remain over Ukrainian production

Urea markets have been subject to a price correction in the last two weeks with the steam running out of the supply-driven bull run that characterised Q3. A lack of firm buying interest in the West last week put pressure on prices in Brazil, US and Europe, although some demand has resurfaced this week.

In the US, granular urea barge prices have fallen below $320 ps ton fob Nola. Brazilian buyers have now secured product at a price over $30pt lower than possible in September. In the East, Chinese international export prices have resisted further price falls, although netbacks for Middle East granular urea cargoes have been under pressure owing to price depreciation in major import markets in the West.

With Profercy's price quotes for some major export origins falling by $20pt in the last two weeks, the Nitrogen Index has dropped six points and stands at 174.15. The charts below clearly reflect the price correction that has taken place.

For further information, as well as analysis of the prospects for urea and nitrogen markets, please contact us for a free trial of the Profercy Nitrogen Service.

India secures record volume of urea through purchasing tender

India has succeeded in booking over 1.8m. tonnes of urea through a major purchasing tender that took place two weeks ago. The country is heavily reliant on imported urea, taking around 8m. tonnes a year, with Chinese prilled urea the dominant product. The latest tender has seen a new record single purchase with over 15 traders agreeing to provide product. Further tenders are expected, but the large volume secured brings India's import programme much closer in line with last year.

One to watch: Ukraine gas supply issues may see further production cutbacks

As discussions regarding Russian gas supplies to Ukraine continue, the Ukrainian government is understood to have blocked access to Ukrainian gas and gas in underground storage for chemical and fertilizer plants. While this does not prevent producers from importing gas independently, whether they will do so is open to question.

Further analysis is available through the Profercy Nitrogen Service. 

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Profercy's World Nitrogen Index falls six points in two weeks as urea price correction takes place

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Profercy's World Nitrogen Index falls six points in two weeks as urea price correction takes place

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Profercy World Nitrogen Index: Methodology

The Profercy World Nitrogen Index is published every week and is based on price ranges provided by the Profercy Nitrogen Service. This includes prilled and granular urea, UAN, AN, ammonium sulphate and ammonia. A full methodology can be found here.

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