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 Q1 2019
Asia
Chinese availability in the coming quarter is expected to increase as gas supply to urea plants is expected to improve. Indian local production is also likely to be higher with a new 1.3m tonne/year starting up on 1 January while the Nagarjuna unit has also restarted production. In Indonesia, Kaltim is expected to continue having some maintenance while Malaysia is due to run normally.
Indian demand is expected to emerge in end January while no major demand is likely further from Bangladesh and Pakistan during the quarter. Southeast Asian demand will continue to be met with contract deliveries.
Europe
There are no major concerns about the supply of urea in the first quarter, but there is speculation that there will be a spring surge as co-operatives and farmers will require volumes at the same time. If buyers wait until the last minute, this could result in firmer European prices and logistical problems.
Demand is typically at its best during the first quarter when Europe prepares for spring application. The weather is a key factor as adverse conditions will prevent farmers from applying nutrients to the soil, particularly if there has been heavy snow. Because prices dropped in the last few months of 2018, buyers have been holding out in the hope that they will fall further. As a result, sellers are talking about the possibility of a ‘spring surge’ in demand, which could see logistical problems including storage at warehouses, offloading at ports and a lack of truck availability.
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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