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 Q3 2020
China was back in the export market with over 1m tonnes loaded in September because its domestic season was over. Logistics were an issue because of bad weather and a lack of workers in Chinese ports, with an unusually high number of vessels loading for India. Indonesia and Malaysia were regular suppliers with tonnes moving to their usual contract markets, southeast Asia and India.
There was a large, unexpected number of import tenders from India. Indian farmers used more fertilizer, especially urea, following a strong monsoon. India bought around 3.6m tonnes of urea in back-to-back tenders during Q3. Demand from Sri Lanka and Bangladesh was also strong. Southeast Asian buyers restricted themselves to formula cargoes or smaller lots because of the higher prices.
Although Q3 is typically the quietest period for urea demand because farmers focus on the harvest, the market was not flooded with urea. Strong and continuous demand from India supported the market in terms of keeping availability steady. Egyptian tonnes, typically directed to Europe, were mopped up by India with various producers selling them for back-to-back tenders. Italy was described as oversupplied on the arrival of Iranian tonnes.
Harvest is the focus for the European fertilizer sector during the peak summer months, so demand for urea typically dips. In 2020, this was more pronounced because of a lack of rain and record temperatures which destroyed a number of crops including grain, corn and rapeseed. The coronavirus had no impact as demand from end-users was strong despite the lockdowns.
With crop demand over and reduced new buying taking place, the amount of supply stayed constant. Although domestic production rates were steady, there was a decrease in imports as New Orleans values were lower, which left inventory fairly balanced. Post-harvest application buying had not yet emerged so there was no extra pull on volumes.
Demand declined with farmer attention focused on finishing their crops and preparing for harvest. Barge business was overall lower with terminals less active as the season advanced. Wet weather also was an issue for several regions with tropical storm activity greatly increased. In terms of volume, refill efforts also remained light.
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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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