Profercy World Nitrogen Index

Week 19 – Nitrogen Index hits seven-week low as slow pace of demand keeps liquidity thin

The Profercy World Nitrogen Index dropped to a seven-week low of 327.50, with the latest decline of 23.80 points marking the largest weekly drop since June 2022.

Four consecutive weeks of sharp price decreases, combined with affordability challenges, have left many buyers reluctant to take any length and instead opt for a last-minute approach to purchases. Indeed, many in SE Asia and Latin America have deferred urea purchases or opted to buy amsul, which remains more competitively priced on a nitrogen nutrient basis.

Spot business has been limited to a handful of sales into Africa. Omani granular product was placed into South Africa at a level reflecting little better than the low-$700s pt fob, well below supplier price targets of $800pt fob early last week. SE Asian fob values have seen a similar correction into the $700s pt fob with regional demand subdued and Australia focused on contract commitments.

With Europe out of the picture and long-haul markets offering far lower returns, North African producers have struggled to place any unsold May volumes, with bid interest scarce even in the low-$700s pt fob.

In the US, Nola granular urea barge values dropped sharply to $550-570ps ton, with the lower levels sparking some liquidity. These levels, which would reflect little better than the $640s pt fob metric equivalent, continue to leave re-export an attractive option.

Indeed, any suppliers looking to place product have begun accepting lower values due to competition from US re-export supply. Russian prills are now available down to $650pt fob, with producers chasing business in Latin America.

Many suppliers, however, remain reluctant to offer firm, and are watching closely for developments in India. Some in the market maintain India will return soon for second-half June onwards shipments. However, many will be mindful that the prior tender saw a record volume comfortably purchased despite the unprecedented supply challenges facing the global market. Indeed, any Chinese participation would also shift the balance, though despite falling domestic values in China, no change in export policy is yet reported.