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 2018
Asia
Outlets for Iranian product continue to diminish in the face of the US sanctions with even India coming out and saying it would not be able to guarantee payments to sanctioned countries. Malaysia will have maintenance at its Bintulu plant for nearly two months. There are some signs that domestic supply will soon improve in Pakistan and Bangladesh has gas supply resumes to some plants.
India returned to the market with an import tender at the start of the quarter. Its statement that payments to Iranian suppliers could not be guaranteed have supported the uptick in prices. Bangladesh is in the market for 450,000-500,000 tonnes of prilled and granular urea while Pakistan is also looking to buy 100,000 tonnes.
Europe
Supply is expected to decrease as traders take positions in order to supply India with tonnes rather than the European market. A flurry of Egyptian business was secured in the final days of September, much of which is expected to go to destinations other than Europe.
Demand typically picks up in the fourth quarter as the co-operatives start to buy for spring application. But there is some discussion that buyers will attempt to hold off securing spring volumes until much later in the year. This of course remains to be seen but now India has stepped back into the market, business may will start picking up sooner rather than later.
Updated to Q3 2018
Asia
Chinese supply is a key focus for the market. While prilled supply is expected to be committed domestically, granular export cargoes are now likely to be available from China given the increase in international prices. Arab Gulf availability is seen constant while there may be some maintenance in Malaysia. Export licences in Indonesia are also being eyed.
Demand in southeast Asia is seen firm but contract cargoes from the Arab Gulf and other availability from Malaysia and Indonesia and even Russia is expected to meet any requirements. India will remain a key buyer while other markets in south Asia such as Sri Lanka, Nepal and Bangladesh are also expected to return to the market.
Europe
European markets will continue to source from Russia and North Africa as producers in Ukraine are shut down because of gas supply issues. The outcome of OPZ’s tender for a new gas tolling partner is eyed while it is not clear when gas supply will be restored to Dnipro. Iranian supply is also available but most buyers are not able to accept these tonnes anymore following the US sanctions.
European markets are done with their requirements for the time being with the next round of buying expected to emerge only at the end of the year. Domestic demand in Russia and Ukraine is likely to pick up around the end of the quarter while Turkey will continue to look for value and step in at lower levels.
US
With the spring demand faded and the US entering a traditionally slower period, making it an unfavourable import destination, the market for the short term will need to find a new outlet for the volumes coming forth. Sentiment is that exports will again become a solid strategy for producers able to undertake such movements.
Overall demand, outside of some remaining rice applications, has retreated as would be expected upon conclusion of spring plants and secondary applications, with the next uptick not expected until refill activities begin later in the quarter. The amount of that demand though will be dependent on whether crop prices stay challenged.
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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.
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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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