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.
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Urea: Market overview
Updated to Q4 2018
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.
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
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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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.