Black Sea urea prices climb to $253/tonne on healthy demand

06 August 2010 14:57  [Source: ICIS news]

LONDON (ICIS)--Black Sea urea prices have climbed to a high of $253/tonne (€192/tonne) this week, supported by healthy demand and expected higher feedstock costs, market sources said on Friday.

An international trader reported paying $253/tonne FOB (free on board) Yuzhny for 25,000 tonnes of urea towards the end of the week.

Earlier in the week, a distributor and a trader reported business in the range $245-250/tonne FOB Yuzhny.

Last week, Black Sea price indications were pegged in the range $242-247/tonne FOB.

Various factors had contributed to the modest price rise, sources said.

Firstly, demand in regions such as Latin America and West Africa remained robust.

In addition, feedstock costs look set to rise as the Ukraine government announced a 9.8% increase to natural gas costs.

If fully implemented, break even urea production costs for the most efficient producer were estimated to increase to $240-250/tonne FOB Yuzhny.

It was expected to take some time for the new gas price to be applied, but firmer urea price sentiment was already being felt as a result of the announcement, sources said.

Yuzhny, Ukraine, is a major fertilizer port in the Black Sea.

($1 = €0.76)

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By: Carl Roache
+44 20 8652 3214

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