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 Q1 2018
Production rates in China are expected to remain low because new penalties for flouting environmental laws came into effect on 1 January, and winter maintenance will continue for next few months. Malaysia continues to produce at normal rates but it not clear if Indonesian granular exports will resume shortly.
Demand remains firm from southeast Asia, where buyers are expected to step in whenever there is a downward correction in the market. Markets such as Bangladesh and Sri Lanka are also short and expected to do some purchasing in the first quarter.
The supply situation is expected to remain unchanged with all producers in Egypt, Algeria, Baltic and the Arab Gulf/Middle East operating at full rates. This could add further pressure to pricing. However, with China remaining out of the market and looking to import some cargoes, this may provide some support to the market.
European and Turkish buyers are expected to return to the market early in 2018, after the holiday season. Buying in 2017 was muted with buyers purchasing on a hand-to-mouth basis, so the outlook is not overly optimistic for demand in the first quarter.
As the quarter unfolds there are expectations that, due to the lacklustre buying this early in the year and with thought the New Orleans price levels could drop lower before spring plantings start, producers will not be encouraged to see increased import volumes and that the current domestic output will be the main supply source overall.
With the overall tepid buying seen to close out the year, and with the quarter moving towards spring sowings and retailers seen as holding reduced stockpiles, demand is anticipated to steadily rise over the quarter. The heavier pull is expected to close out Q1 as farmers begin the crop season and could be looking eagerly for a drop in nitrogen prices.
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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.