Profercy World Nitrogen Index

Week 18 – Nitrogen Index declines to five-week low as urea liquidity dries up post-Indian tender

The Profercy Nitrogen Index continued its decline to hit a five-week low of 351.30, with the weekly drop of 18.59 points marking the biggest decrease since November 2022. 

The absence of any major demand has left any unsold May urea cargoes struggling to find outlets. In many markets, fob values are now at levels seen before the announcement of the 15 April Indian Potash Limited (IPL) tender, if not marginally lower. 

Affordability challenges have also weighed on demand for urea, with buyers in Latin America and SE Asia deferring their demand in the hope of lower prices later in the year or shifting their focus to other, more competitively priced nitrogen products like amsul. 

In the Baltic, prills have been placed below $700pt fob for Latin America, with business also noted for India. Values in Africa have continued their decline into the $700s pt fob as western demand has been lacklustre.

With the exception of negligible small lot business, Europe has shown little interest for fresh urea vessels as the end of the season approaches, while dry weather has also weighed on domestic nitrates values.

In the USA, the Nola barge market has shown very little liquidity. With plenty of product already available further inland at the terminals, few have been keen to take length.

Values moved down to $580-585ps ton fob Nola on 7 May, a roughly two-month low. On the back of the declining prices and demand, the USA has positioned itself as a re-exporter instead. 

While eastern fob markets had been more durable due to producers being largely comfortable for May, limited spot demand in the East has created competition. Small volumes of SE Asian product were placed down to $790pt fob, with larger cargoes on offer at well below that level, while values for Omani material also moved down to the $700s pt fob. 

The lack of competition in the absence of India has set the market on the path of a downward correction, while the prospect of a peace deal in the Middle East have further increased buyer caution.

Many are of course watching for further developments in regard to any potential opening of the Strait of Hormuz. India is also anticipated to return with a fresh inquiry for second half June shipments onwards, with some maintaining this could be announced as early as second half May.