Profercy World Nitrogen Index

Week 41 – Granular urea rebounds as global trade picks up

Granular urea trading activity accelerated after a few sluggish weeks, allowing producers to begin extending sales into November.

North African prices rose nearly $50pt in the space of a few days on the back of an improvement in trader inquiry for shipment to Europe. Some 100,000t has been placed at the producer level in Egypt and Algeria, with a portion of this demand understood to have been from those looking to cover earlier sales to Europe.

Activity has also improved across Latin America, with small volumes sold in Argentina, while Mexican buyers have sourced Chinese granular material.

However, Brazilian buyers continue to adopt a cautious approach to procurement, with domestic demand concerns and credit constraints limiting activity despite significantly lower year-to-date nitrogen imports relative to previous years. Prices have edged up, but still lag those in the USA. The forward Nola market advanced to over $500pt cfr equivalent.

In many respects, the market has shrugged off the low offers into the most recent Indian purchasing tender, which was always expected to be China prilled affair. The inquiry secured just 410,000t against a target of 1.7m. tonnes, with Chinese suppliers unwilling to support business sub-$325pt fob. The market is now assessing the timing of the next Indian inquiry.

The Profercy Nitrogen Index recovered 3.30 points to 219.71 after hitting a five-week low last week.