Profercy World Nitrogen Index

Week 21 – Nitrogen Index hits 12-week low as Chinese exports set to return

The Profercy World Nitrogen Index dropped by 21.78 points to 286.38, the lowest since 5 March. Still, that is some 65.67 points above late-February, before the start of the Middle East conflict.

China’s return to international urea trade with the issuance of around 2m. tonnes of export quotas for June onwards shipments has offset the emergence of fresh Indian import inquiry and left global urea values on a soft footing.

India’s National Fertilizers Limited (NFL) will close a purchasing tender on 8 June seeking 1.7m. tonnes for shipment by 20 July. Strong competition was expected into the tender, even before the Chinese news, given that demand has been at a low ebb since the previous mid-April Indian inquiry.

Given further details such as CIQ processes have yet to be confirmed, the level of Chinese participation into the Indian tender remains in question. However, China’s return has raised the stakes for other suppliers.

A number of fob prices, which have already been under pressure for several weeks, fell below $600pt, including granular urea values for the Baltic, Black Sea and Nigeria.

Outside of India, demand remains thin with competition between suppliers in Brazil pushing values in that market to below $600pt cfr.

The Nola market, which has been drifting lower for several weeks due to limited demand, dropped sharply to hit levels seen before the start of the Middle East conflict.

Ahead of 8 June, the market is now watching for further developments in regard to Chinese export policy and whether the US and Iran will reach a deal to reopen the Strait of Hormuz.