Profercy World Nitrogen Index

Ammonia and UAN prices continued to decline and dragged the Profercy World Nitrogen Index lower even as most key urea prices remain stable. As a result, the Index declined by 0.64 points week on week to 117.37 points following two consecutive weeks of gains.

The weakness in the ammonia markets is leading to talk of production cutbacks to ease production pressure. The Yuzhnyy ammonia price moved below $240pt fob.  Production cutbacks may need to be considered for UAN with the recent rulings by the European Commission on UAN tariffs disrupting traditional trade flows and significantly increasing supply in the USA.

Elsewhere, urea prices consolidated recent modest gains despite the volume booked in the latest Indian tender being smaller than expected at 375,000t. This in large part due to expectations that India will tender again in May despite the current, and ongoing, elections in India.

In the meantime, Arab Gulf producers are not under pressure with the latest Indian tender affording an opportunity to consolidate prices over $245pt fob. In Egypt, prices were unchanged with top off sales reported above $260pt fob. A significant portion of May availability has already been committed to traders on formula.

Other regions in the west are muted and largely directionless while appetite in China for imports now appears to have waned. Further analysis on eastern urea demand is available here.