Supply cutbacks collide with US and Indian demand to lift urea values 18% since early-January

Urea markets have begun the year on a firm footing with Middle East spot values surpassing $480pt fob, an advance of 18% on price levels in early-January.

Strong buying interest was noted in the latest Qatari sales tender for a second half March shipment with multiple trading firms bidding in the $470s pt fob with a sale subsequently concluded in the low-$480s pt fob. Prior to this, last concluded business in the region took place little over 10 days ago at $460pt fob.

Firmer eastern values followed a further round of business in North Africa that pushed spot prices above $500pt fob for the first time since early-November 2025. At least 60,000t of granular urea have been placed since the weekend.

Basis Profercy’s daily price data, Egyptian granular prices have gained $52pt or 12% since the middle of the month.  

Supply cutbacks - both foreseen and unexpected - have made life challenging for buyers at a time when many anticipate continued demand from the USA for shipments into March and further Indian inquiry.

China is absent from international trade with a lack of export quotas reducing business a handful of cargoes so far this year. Just two vessels were committed to India in the 2 January purchasing tender.

The scale of seasonal gas diversions in Iran is reminiscent of those end-2024 and into Q1 2025, removing as much as 450,000t/month from the market.

Domestic requirements have limited Indonesian export commitments to a single cargo so far this year.

Elsewhere, production in Trinidad is not operational, while one Black Sea supplier is set to be out for February. Exports from Venezuela were also disrupted earlier in the year.

For European buyers, US demand and trader positioning has consistently raised the price bar for offshore urea. Sales of January and February cargoes from Nigeria and Algeria reduced availability for EU markets, while also encouraging traders to secure positions and cover earlier shorts.

Prior CBAM anxiety gave way mid-January with both North African spot values for urea and warehouse prices in Europe advancing. Quotes for product in place in La Pallice, France, are approaching €500pt FCA while North Africa granular urea for March shipment was sold above $500pt fob for the first time since first half November 2025.

For the time being, many European importers are taking on CBAM related price exposure. The policy has, however, stemmed inquiry for UAN, nitrates and amsul, largely owing to high default costs for regular suppliers, including those in Turkey and the USA.

With current urea fob benchmarks only marginally below the highs of June and August 2025 - a period where trade was influenced by geopolitical events, North African production cutbacks and seasonal Indian purchasing - there are some nerves in the market regarding the outlook for the coming months.

The prospects for February and into March are heavily predicated on whether Indian demand surfaces, as most anticipate, as well as the strength of US inquiry. Australia could shape trade in the east.

As Q2 approaches, many will be looking to China for any cues as to whether export business will resume earlier than in 2025.