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 Q2 2020
Asia
China was away from the export market because of domestic demand. This led to Egypt selling a significant quantity to India under tenders and eased the pressure in North Africa. Indonesian and Malaysian supply was unchanged. In India, the start-up of the 1.3m tonne/year Ramagundam plant was delayed again to September from June, this time due to the country’s lockdown.
Domestic demand in India was at record levels as rainfall was above average. Farmers planted double the crops compared with 2019. The Indian government is also not extending its 2m tonne/year contract with OMIFCO in Oman. Demand in the Philippines also increased because of a government programme to ensure food supply. Sri Lanka and Nepal also continued purchases. Demand in southeast Asia was met with contract deliveries.
Europe
There was no shortage of urea available, despite it being peak season for European fertilizer application. Tonnes from Egypt, which is a major exporter of urea to Europe, moved to India. Large volumes from Egypt were also fixed to the US, but this had no impact on Europe’s supply. Turkey was sufficiently covered with supply from Turkmenistan and Iran.
Despite the coronavirus, demand for urea was steady. The dry spell of weather was not particularly favourable for the farming community, but there appeared to be little stock carried over. There was some panic buying in early Q2, but this eased as buyers realised that there were no problems with security of supply. As Q2 drew to a close, demand started to ease which is typical for the time of year.
US
Supply increased as crop plantings progressed during the quarter, with interest rising for both New Orleans barges and upriver deliveries. There was also greater movement out of the river and inland terminals throughout the period, with domestic production staying active. An increase in imports also contributed to the market being well supplied.
As sowings advanced, there was a significant surge in demand during Q2 as buying activity rebounded on more favourable conditions. Poor weather in Q1 had held back spring activities. While plantings were not as high as once expected, farmers increased their acreage year on year and there was certainly stronger pull for urea than seen in 2019.
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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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