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
Urea supply in Asia increased during the first quarter as the 1.34m tonne Chambal Fertilizer plant in India was commissioned on 1 January. The tonnes from the plant would be for domestic supply and expected to lower India’s annual imports. Chinese supply was limited even during the off season. The Kaltim V plant resumed operation in mid March following a lengthy turnaround that started several months ago. Global urea prices were under pressure on seasonal slump in demand in various importing hubs.
Demand was slow with India buying 515,000 tonnes in its tender in January compared to a purchase of 1.8m tonnes two months ago. Iranian cargoes are heard to have met some of the demand in southeast Asia. Sri Lanka, Nepal and South Korea were in the market for smaller lots.
There was no shortage of supply largely because the market is at a seasonal low during the peak winter months. Tonnes were available to all exporters to Europe.
Demand was low during the first quarter but this is typical in the urea market. All eyes were on international developments in order to give the market some direction moving into the spring. But even with the spring approaching the mood was bearish across the nitrogen sector.
There was no shortage of urea available in the US during the first quarter and as a result prices moved down. The movement of material along the river was however hampered at times by poor weather conditions. Internationally, urea was also well supplied so there was no shortage of product from Qatar or Saudi Arabia.
Poor weather across the Midwest, coupled with falling prices internationally dampened demand. Buyers typically step to the sidelines when prices are declining and this was clearly evident in the US. Owing to the poor weather there was some loading delays in New Orleans which resulted in prices firming as the first quarter drew to a close.
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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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