The ICIS weekly Urea reports are covered in China, Europe and the US as well as globally in The Market report. For China, there is an extensive coverage of export, ex-works and ex-warehouse prices, and the Europe report concentrates on spot prilled and granular grades in Yuzhny, Baltic, Middle East and northwest Europe, while the US has spot quotes for the US Gulf and Arab Gulf. All these prices assessments are supported by an independent market commentary that includes details of production news, exports, regional updates, demand and supply and any other key influencing factors. This reliable market intelligence can help you to make informed commercial choices.
Updated to Q4 2019
Urea supply from Indonesia and Malaysia was largely unchanged, while Chinese availability increased. Lack of demand in the domestic market and a favourable currency led to exporters accepting lower prices. Over 1m tonnes was exported to India in tenders during the quarter, while re-export also continued. Domestic production in India remained intermittent with some plants undergoing maintenance while Pakistan’s domestic supply was enough to meet farmers’ requirements in the country.
Indian demand continued to exceed expectations given record rainfall in the country, which came in at a 25-year high. Around 3.7m tonnes of urea were delivered to India in the fourth quarter while a further 710,000 tonnes will arrive in January 2020. Demand in other markets was thin, with southeast Asian requirements being met by contract deliveries or shipments from China.
A high level of demand from India attracted tonnes from Egypt which otherwise would have been offered in Europe. A well-supplied market in Turkey, with tonnes from central Asia and Iran, also meant that urea, typically destined for the Turkish market, was available for northwest Europe.
Poor weather and falling international urea prices meant that demand remained low in Europe. Retailers and wholesalers were reluctant to secure tonnes because of the steady decline in global urea values, even though India came to the market with its second largest tender – at close to 1.8m tonnes.
With farmers widely prevented from normal levels of post-harvest applications during the quarter by weather interruptions, there was a decline in demand. This drop in usage, coupled with significant carryover from deferred spring applications, has left inventory well stocked. In addition, the US market experienced lower trading values which kept further imports of urea away.
With winter conditions settling in early, farmers skipped a significant amount of their end-of-year applications and in many areas had to leave some acreage unharvested. This left demand greatly diminished. Crop prices have also remained challenged which has caused a return of buyer reluctance ahead of next season.
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Nitrogen (N) fertilizers are produced chemically using natural gas and hydrogen that is contained in the air. Ammonia is produced by mixing nitrogen and hydrogen gases in the presence of heat, pressure and a catalyst compound.
Urea is the most widely-produced and commonly-traded nitrogen fertilizer. Production amounts to more than 140m. tonnes a year, of which about 30m.
Urea occurs as white hygroscopic crystals, which are either odourless or have a slight smell of ammonia. Urea is not considered to be harmful at normal temperature, but the dust may irritate the skin, eyes and nose.
The major outlet for urea, accounting for nearly 90% of total consumption, is as a fertilizer. Urea is also used in the manufacture of urea-formaldehyde resins, the synthesis of melamine, in adhesives and paints, and for laminates, moulding compounds, impregnating paper and textiles.
Urea is widely traded on international fertilizer markets. There are two main hubs in urea trade – the Black Sea and Arab Gulf. These flows are said to determine the global urea prices.
Urea production involves a two step process where the ammonia and carbon dioxide react to form ammonium carbamate which is then dehydrated to urea. In the process, ammonia and carbon dioxide are fed to the synthesis reactor which operates around 180-210oC and 150 bar pressure.
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